How you could use the First Home Super Saver scheme and First Home Guarantee to help secure your first property in Tassie.
Extra help for buying your first home.
First home buyer grants
Under Tasmania’s First Home Owners Grant, eligible first-time home buyers can receive a grant of $30,000 to help them build or purchase a brand new home. This is the most generous first home grant in Australia and it can help make the process of buying or building more affordable for first home owners as well as supporting the local construction industry.
Upfront cost help
Tasmania’s first-time buyers can apply for Australia’s First Home Guarantee (formerly called the First Home Loan Deposit Scheme or FHLDS) to assist in lowering the amount of deposit they need - sometimes down to just 5%. The Federal Government act as guarantor on some of your mortgage, thus removing the requirement for Lenders Mortgage Insurance.
Tax help with saving
The FHSS scheme (First Home Super Saver Scheme aka FHSSS) helps you save for the deposit with a tax rate generally set at 15% which is well below normal income tax rates.
On her 25th birthday, Lili decided she wanted to stop renting and buy a home of her own. She wants something new and after looking around for a while she sees a home under construction in Hobart for sale at $580,000. She does her sums and her paperwork and manages it as follows:
Tip – In Tasmania there’s a 50% stamp duty concession available for first home buyers who buy established homes under $600,000 and meet other eligibility criteria.
If this won’t be you, you’ll need to save for stamp duty as well as the deposit.
Early savers can gain tax concessions on up to $15,000 per year by saving into their super, and this can be withdrawn under First Home Super Saver rules when a property is purchased.
How does the First Home Super Saver Scheme work?
Under the FHSS, first-time home buyers can make voluntary contributions into their superannuation where these contributions are taxed at 15%, so you can potentially save more money for a deposit faster. You then apply to have those contributions (and any related earnings) released, to help pay for a deposit on a home.
FHSS savings can give you a decisive advantage in house hunting in Tasmania.
How do I save using the FHSS?
Many people save via salary sacrifice (having some of your salary paid to your super account instead of your bank account). The other common way is to make your own contribution and then claim it as a tax deduction. Both can be good ways to top up your super and build the funds for when you want to use the FHSS.
What is the First Home Guarantee?
First Home Guarantee is an Australian Federal Government program designed to help eligible first-time home buyers purchase a home with a deposit of as little as 5% instead of the usual 20% required by many lenders. Approved buyers will also not pay Lenders Mortgage Insurance.
How does the First Home Guarantee work?
The Australian Government’s First Home Guarantee (FHBG) is designed to help eligible applicants pay a lower mortgage deposit, without having to meet the expense of Lenders Mortgage Insurance, which can bump up the loan amount by around $10,000. Under the scheme, the Federal Government guarantees part of your mortgage.
What are the eligibility criteria?
To meet the criteria for the First Home Guarantee (aka First Home Loan Deposit Scheme or FHLDS) in Tasmania, you must generally be:
Only residential real estate is eligible, but this can be:
In Hobart in 2023, the property can’t be valued at more than $600,000 or $450,000 in the rest of Tasmania.
For full eligibility criteria details, check out the First Home Guarantee site.