How to buy your own place in the ACT with the First Home Super Saver scheme and First Home Guarantee.
Info that could help you buy your first home sooner.
First home buyer grants
The ACT doesn’t currently have first home buyer grants.
Upfront cost help
First-time purchasers living in the ACT can apply for the Australia-wide First Home Guarantee as a way of lowering the amount of deposit required and avoiding expensive Lenders’ Mortgage Insurance. What’s more, the ACT Home Buyers Concession Scheme frees first home buyers from all stamp duty, as long as their household income is less then $170,000 (higher if you have children).
Tax help with saving
First Home Super Saver (FHSS or FHSSS) is a Federal Government scheme to help save for the deposit with a tax rate generally set at 15%, well below normal income tax rates.
Taj is sick of renting and decides now is the time to buy his first home. There’s an apartment building he’s had his eye on, and Taj finds a smart little two-bedder for $575,000. This is how he secures it…
Tip – The First Home Guarantee only gives successful applicants three months after approval to finalise their contract.
Taj located the property first but if you can’t do that, it’s a good idea to make sure that you are prepared and ready with all the information so you can move forward promptly when the time comes.
How does the First Home Super Saver Scheme work?
The FHSS is designed to help buyers get a foot on the property ladder, while also providing a useful tool for saving for a deposit on a home. The scheme makes it possible for first home buyers to take up to $50,000 from their super, in order to cover the costs of the deposit. There are restrictions, however.
Only super that you have voluntarily contributed (and its associated earnings) can be accessed.
The good news is, some voluntary contributions are taxed at a lower rate than income tax, making it easier to save.
The ACT does not have first home buyer grants but tax concessions on saving through FHSS can help.
How do I save using the FHSS?
To access the FHSS, you need to have deposited your own money into your super account first.
On the plus side, before-tax voluntary contributions to your super attract a reduced tax rate of only 15% instead of the higher tax rate you’d otherwise pay on your income.
The two main ways to make before-tax contributions are:
Either way, you save by paying less tax.
You can also make and use any after-tax contributions you make to your super.
Note, there are limits on how much you can contribute to your super each year.
What is the First Home Guarantee?
First Home Guarantee (FHBG) is an Australian Government program designed to reduce the upfront cost of buying a first home.
Eligible buyers can purchase their first home with a deposit of as little as 5%, and without needing to pay Lenders Mortgage Insurance each year.
How does the First Home Guarantee work?
The Commonwealth Government’s Guarantee (or FHBG) is available to eligible first-home buyers who can only afford a small deposit.
The government guarantees the remaining balance of the deposit, so buyers who can’t pay the usual 20% deposit, can access a mortgage without having to pay a large deposit or expensive Lenders Mortgage Insurance.
What are the eligibility criteria?
Generally, when applying for the First Home Guarantee (also known as First Home Loan Deposit Scheme or FHLDS) in the ACT in 2023, you must:
Only homes to live in fall under the scheme, such as:
In the ACT, to be eligible, the maximum value of the property is $750,000.
For more information about eligibility, check out the FHBG site.