How First Home Buyer grants can kickstart your property investment journey

Making the jump from renting to owning your own home effectively means you become a property investor. Yes, you might be investing in your own home, but this is still a form of property investment. That’s because the house you buy can potentially appreciate in value over time. Or, you could eventually make money from renting out the place.

Using a first home buyer (FHB) grant to make a property purchase is an attractive option for many people because of the financial assistance it can provide. It is an essential step if you want to get started on the property ladder. With all FHB grants, there are eligibility requirements in place. So, if you would like to know if you qualify, keep reading!

In this article, we’ll explore the various grants available to first-time buyers in Australia. We’ll also explain how to access these grants and what you need to know before applying.

First home buyer schemes in Australia

Whilst there are different first home buyer grants available at the state level, here are the five main grants available across Australia:

Help to Buy scheme

This initiative, introduced by the Australian Labor Party, aims to make homeownership more accessible to Australians by contributing up to 40% of the property price for a new home and up to 30% for an existing one. And the best part? This scheme only requires that you have a 2% deposit and it also means that you can avoid paying Lenders Mortgage Insurance. Under the scheme, the government will own a share of your property value until you pay them back in the future. This opportunity will be available for 10,000 buyers annually.

Commencing in July 2023, the Help to Buy scheme is accessible to Australians with an individual gross income not exceeding $90,000, or $120,000 per couple.
First Home Guarantee

Are you a first-time home buyer struggling to save up for a deposit? Well, we have some great news for you. With the First Home Guarantee, you may be able to qualify for a home loan with as little as a 5% deposit and without paying the dreaded Lenders Mortgage Insurance (LMI) fees. This scheme is the perfect stepping stone for those who dream of owning their own home but are struggling to scrape together a big enough deposit. Plus, the Australian government acts as your mortgage insurer, providing further reassurance to your lender.

So, if you’re a single first home buyer earning up to $125,000 per year or a couple earning up to $200,000, then this scheme could be just what you need to get on the property ladder.
Family Home Guarantee

This scheme, facilitated by the Australian Government since 2021, is designed to help single parents purchase a new or existing home with just a 2% deposit, without the need to pay LMI. The good news is that you don’t have to be a first home buyer to qualify for the scheme. The only eligibility criteria is that you must not currently own property, and your taxable income can’t exceed $125,000.

With 10,000 total places initially available, the government has agreed to an additional 5,000 spots every year from 1 July 2022 until the Family Home Guarantee scheme is scheduled to conclude in mid-2025.
Regional First Home Buyer

The Regional First Home Buyer Guarantee (RFHBG) is an initiative of the new Labor Government to assist eligible home buyers in purchasing a home in regional areas. Administered by the National Housing Finance and Investment Corporation (NHFIC), the RFHBG offers up to 10,000 places for eligible first home buyers until 30 June 2023. The NHFIC guarantees part of the eligible home buyer’s loan, so they can purchase a property with a deposit of as little as 5% without paying Lenders Mortgage Insurance.

To be eligible for this program, individuals must earn no more than $125,000 and couples no more than $200,000. They must also intend to live in the property they are purchasing and cannot have previously owned or had an interest in a property in Australia.
First Home Super Saver

The first home super saver scheme is a unique opportunity for those who have never owned property in Australia to save for their first home inside their super fund. By making voluntary contributions, up to $15,000 each financial year, and a total of $50,000 over all years, this scheme allows for a practical and efficient way of accumulating savings.

How property investors can benefit

Getting started in property investment can be difficult, particularly for those with limited savings or a low deposit. That’s why it’s important to be aware of the various government initiatives that are available to help make the process easier. Because it’s true what they say, owning property is one of the best ways to build long-term wealth and financial security.

There are many paths to take in achieving this goal, and one of them is through accessing FHB schemes. However, strict criteria are in place, such as the requirement to live in the home for a certain period. Ultimately, you must remember that the path to long-term wealth through real estate is a journey that requires patience, commitment and sound financial planning.

Buying your first home doesn’t mean you’re limited to investing in a single property either. With the right strategy, it’s possible to gradually build a portfolio of properties over time that can help you create a passive income and secure your future.

The most obvious benefit of investing in property is the potential for capital growth, which can come from either natural market forces or through improvements. Capital growth is an important part of any successful property investment strategy but it shouldn’t be the only focus. Property investors should also pay attention to rental yields, the amount of rent you can expect to receive from a property compared to its purchase price.

Final thoughts

At Ironfish, we are very proud of the level of service and support we provide our customers. It goes well beyond a simple property transaction. Our mission is to help our customers feel inspired, informed, and empowered. As property investors ourselves, we understand the importance of having a vision. That’s why we offer data-driven investment insights from our research team to power your investments. Furthermore, our seminars and events cover investment concepts, strategies, lending, and more, allowing you to expand your knowledge and make smarter investments.

We believe that by investing in property, you have the opportunity to create a better future for yourself and your family.

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