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2021-01-16 Property Tips

Government incentive schemes for homebuyers and how they've changed recently

In 2020, state and federal governments introduced or expanded schemes that aim to ease the financial burden on people looking at buying a home.

Combined with the lowest cash rate target the Reserve Bank has ever set, these incentives (which in some cases you can use alongside one another) make 2021 an exciting year for homebuyers.

But getting your head around each scheme can be a bit tricky, especially since important details have changed in recent months. So we’ve put together this quick guide to help you get a better idea of if and how each one suits you.

The First Home Owner Grant 2021

What it is

A payment of $10,000 towards your first home (in metro Melbourne)

Who offers it

The Victorian State Government

What’s changed

Nothing! The scheme remains the same. If you’re considering buying your first home, it’s a great opportunity to get a big boost towards your deposit.

There are a couple of important things to keep in mind, though:

The maximum value of the house, townhouse, apartment or unit that you can buy or build under the scheme is $750,000.

And you’ll need to occupy the home for 12 months as your principal place of residence to make sure you’re eligible. You’ll also need to move in within a year after settlement or completion of construction.

Eligibility

Find out if you’re eligible for the First Home Owner Grant

Stamp duty reductions 2021

What it is

Measures that reduce stamp duty to varying degrees depending on your circumstances

Who offers it

The Victorian State Government

What’s changed

For a while now, state government stamp duty concessions have been pretty generous for first home buyers. In fact if you’re a first-time buyer and the total value of your land and home is under $600,000 you may be eligible for an exemption, which means you’ll pay no stamp duty at all.

But in the most recent Budget, the government introduced incentives for more homebuyers.

Now, if you buy a new home valued at under $1 million between the 25th of November 2020 and the 31st of June, 2021 you may be able to save as much as 50% on stamp duty.

How much you’ll pay

Find out how much you’ll need to pay in Transfer (Stamp) Duty

First Home Loan Deposit Scheme 2021

What it is

A program that lets you pay as little as 5% of the purchase price for a home deposit

Who offers it

The Federal Government

What’s changed?

The scheme has expanded.

The government announced that 10,000 additional places would be offered between the 6th of October 2020 and the 30th of June 2021 for new builds.

Eligibility

Find out if you’re eligible for the First Home Loan Deposit Scheme

HomeBuilder 2021

What it is

A grant of up to $15,000 to build a new home

Who offers it

The Federal Government

What’s changed?

Three main things:

The government has extended the date by which you’ll need to have signed a building contract for this scheme – it’s now the 31st of March 2021.

They’ve also increased the maximum value of a property (including the home and land) eligible under the scheme in Melbourne. It’s now $850,000, which is $100,000 more than the previous cap.

And finally, there’s been an extension to the construction timeframe. That means where previously you needed to begin construction within three months of signing your contract, now you can begin within six months. This will apply to all eligible contracts signed on or after the 1st of January 2021 – and, even better, will be backdated and apply to all contracts entered into on or after the 4th of June 2020.

Eligibility

Find out if you’re eligible for HomeBuilder

Disclaimer

Eligibility requirements and some restrictions apply to all of the programs mentioned above. To assess your eligibility, visit the respective websites listed under the Eligibility section for each scheme. The information contained in the infographic above is general in nature and does not constitute legal or financial advice.

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