Get into your own little piece of the West using the First Home Super Saver scheme and First Home Guarantee.
How you could get extra help with your first home deposit in Western Australia.
First home buyer grants
WA’s First Home Owner Grant is a government scheme that provides a $10,000 payment to eligible first-time buyers, to help them build a home or buy one that’s brand new (or has just been substantially renovated). The maximum eligible property value is $750,000 if you live south of the 26th parallel (e.g Perth), or $1 million if you live north of it.
Upfront cost help
First home buyers in WA who face a hight mortgage deposit - often around 20% - can apply for the national First Home Guarantee, to help reduce the deposit and avoid costly Lenders Mortgage Insurance. In addition, WA’s First Home Owner Rate of duty provides a lower rate of stamp duty for house and land of value up to $530,000 or $400,000 for vacant land, while the Home Buyer Assistant Account offers a grant of up to $2,000 for incidental expenses on properties up to $400,000.
Tax help with saving
The Federal First Home Super Saver scheme (aka FHSS or FHSSS) helps build savings for the deposit as the tax rate is generally 15%, which is well below normal income tax rates.
Office-worker Joel decides it’s time to move out of his sharehouse and buy a place of his own.
He likes the idea of something new and finds a home and land package just out of Perth that looks great and is on the market for $570,000. It’s over the threshold for First Home Owner Rate of Duty, but he still manages to afford it with these five steps:
Tip – The thresholds for first home programs are set quite low in WA so it is wise to plan on the basis that you might not qualify. Saving early can be rewarded with a tax concession if it is done through your super. The funds can be withdrawn when you need them under the First Home Super Saver rules which include thresholds that suit early savers.
How does the First Home Super Saver Scheme work?
The FHSS scheme is designed to help first-time buyers enter the housing market by allowing them to use some of their self-contributed super for a home deposit and achieve their goal of home ownership.
You must also meet certain other requirements, such as living in the home as soon as you can, and for at least six months of the first 12 months you own it.
Only voluntary super contributions can be used, but these are generally taxed lower than normal income so you can potentially save more, sooner.
How do I save using the FHSS?
To take advantage of the FHSS, you must make voluntary contributions to your own super first.
This can be a good way to save, because if you make before-tax contributions or after-tax contributions and claim a tax deduction on them, those funds are generally taxed at just 15% and not the regular, higher tax rate.
When you’re ready to buy your first home, you can then withdraw from those voluntary contributions, plus the earnings they’ve accumulated over time.
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?
The First Home Guarantee (FHBG) is an Australian Government program designed to help eligible purchasers buy their first home with a deposit of 5% (or more), which is far below the 20% usually required by loan providers to avoid Lenders Mortgage Insurance.
How does the First Home Guarantee work?
The First Home Guarantee (FHBG) allows first-time home buyers to purchase a home with a deposit of as little as 5% of the property value, rather than the usual 20% required by most lenders. By guaranteeing part of the mortgage, the scheme can help first-time buyers who don’t have enough saved for a large deposit.
What are the eligibility criteria?
Generally, in WA in 2023, to be eligible for the First Home Guarantee (in the past called First Home Loan Deposit Scheme or FHLDS) you must meet the following criteria:
Only mortgages on residences can be included, but this could be for:
In Perth, the property must be valued at no more than $600,000, and in other parts of WA up to $450,000.
For the full eligibility criteria, visit the FHBG site.