Buying Tips

Grants And Schemes To Help You Buy Property

As real estate agents, we know that buying a property here on the Surf Coast doesn’t always come cheap.

In September 2020, the median house price in Torquay was $840,000. In Anglesea, it was $992,500. Apartment prices aren’t much lower, with the median Torquay unit selling for $665,000.

The good news is that the Victorian and Commonwealth Government offer several grants and schemes to home buyers into the market. And, best of all, it’s not only first home buyers who can benefit from some of these initiatives.

We take a look at what’s available to help buyers in 2020.

1. Grants and schemes for first home buyers

The hardest step in most people’s property journey involves getting onto the property ladder in the first place. That’s because it usually requires buyers to put together a hefty deposit, as well as paying for stamp duty and other upfront costs.

This can often take years of hard work and saving.

The Victorian and Commonwealth governments acknowledge that first home buyers have it tough and there are no less than four grants and schemes available to help them into their first home. These include:

  • The Victorian government’s First Home Owners Grant. This provides $20,000 to first home buyers who purchase property in regional Victoria, so long as the property is valued under $750,000 and less than five years old.
  • Stamp duty exemptions and concessions. First home buyers pay no stamp duty on properties valued up to $600,000 and then receive a concessional rate on property costing $600,001 to $750,000.
  • The Commonwealth government’s First Home Loan Deposit Scheme. This scheme assists buyers to get onto the property ladder with as little as a five per cent deposit by guaranteeing up to 15% of their home loan. This means first home buyers can avoid the cost of taking out lender’s mortgage insurance (LMI). Income caps and other eligibility requirements apply.
  • The First Home Super Saver Scheme. This lets first home buyers boost their savings using up to $30,000 of voluntary contributions to their superannuation. The benefit is that this amount would be taxed at the superannuation tax rate of 15% and not the buyer’s usual marginal income tax rate. The first home buyer can then withdraw these voluntary contributions and use them towards their home deposit.

First home buyers are also eligible to apply for the $25,000 HomeBuilder scheme (more on this below) in conjunction with the other grants and schemes.

2. The HomeBuilder grant: helping you build or renovate

The Commonwealth government’s HomeBuilder grant has had many of us dreaming of a major renovation.

The HomeBuilder scheme provides $25,000 towards the cost of “substantial renovations”. This includes carrying out major works on your principal place of residence. To be eligible, construction costs must be between $150,000 and $750,000 and your home is worth less than $1.5 million.

The grant also applies to knockdown rebuilds and off-the-plan purchases. However, it can’t be used on second homes or investment properties.

To qualify, you’ll need to jump through several hoops, including earning less than $125,000 as an individual or $200,000 as a couple. You also need to sign a building contract between 4 June 2020 and 31 December 2020 and construction needs to begin within three months.

If you’re considering a build or major renovation read our article on factors you should consider.


3. Stamp duty concessions for homes under $550,000

Stamp duty, or transfer duty, is one of the biggest upfront costs in buying property, especially here in Victoria. In fact, sometimes it can even act as a disincentive to move home.

The Victorian Government aims to help any owner-occupier’s buying at lower price points through the Principal Place of Residence Concession.

The PPR concession is available to home buyers purchasing a property valued under $550,000. To be eligible, buyers need to use the property as their principal place of residence within 12 months of settlement and need to live in the property for at least 12 continuous months.

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On a property costing $440,000 to $550,000, the stamp duty reduction will save you a flat rate of $3,100.

The State Government also offers Transfer Duty concessions for people buying off-the-plan. This includes house and land packages, high or low rise apartments, and refurbished lots.

4. Transfer duty concessions for pensioners and concession cardholders

Many people may not realise that, since 2011, the Victorian Government has been offering stamp duty exemptions and discounts for pensioners and concession cardholders.

There are two categories under this scheme:

  • Cardholders receive an exemption from duty when buying a home valued at $330,000 or less, and
  • A concessional rate applies to homes valued between $330,001 to $750,000.
  • House and land packages and established properties are both eligible. So too is a share in a property, as well as vacant land – so long as you build within three years.

Cardholders that can apply for the scheme include pensioners, Services Australia Health Care cardholders and DVA Gold Health Care cardholders.

Homebuyers can only claim this exemption or discount once. However, the scheme can be used in conjunction with other grants and schemes, including the first home buyer grant.

You can work out potential savings under these transfer duty concessions and exemptions using the calculator online.

How these grants and schemes could help you buy on the Surf Coast

Finally, with so many grants and schemes available right now, it’s worth considering how they might apply to the local property market here on Victoria’s Surf Coast.

Although we have a relatively high median price, many entry-level properties may qualify for some of these grants given that they fall under some of the thresholds.

It is also a good time to potentially buy vacant land and build your own home.

For instance, this land sold in Torquay for $525,000, or this block of land currently on the market for $495,000. Depending on your own circumstances and what you intend to build, buying land means you could be eligible for HomeBuilder, as well as other grants and concessions.

You can also read about how one first homeowner, Olivia, got onto the local property ladder by buying land and building her own home in Torquay.

Further information?

If you’re looking to buy or sell on Victoria’s Surf Coast contact me for further information.