Blog

By Tali Miller – Trainee Solicitor

The dream of owning a home is a cornerstone of the Australian dream, especially for first home buyers in Victoria. Recent changes announced in the 2024/2025 Victorian state budget have significant implications for aspiring homeowners. Looking to buy your first home in the next 12 months? Here’s what you need to know before you do.

The First Homeowner Grant (FHOG) offers $10,000 to eligible first home buyers who buy or build a new home valued up to $750,000. The home must not have been previously sold or occupied. However, the FHOG will end after the 2024/2025 fiscal year due to the introduction of the federal Help to Buy scheme. The Victorian government has allocated an additional $700 million for its final year.

The Help to Buy scheme provides shared equity home loans to eligible buyers with a deposit as low as 2%. The government acts as an ‘equity partner,’ funding and owning 30-40% of the property. No lender’s mortgage insurance will be payable on the loan, and you won’t need to pay any rent on the government’s share. This means lower initial costs and easier access to homeownership for many buyers who might struggle to save for a larger deposit. It also reduces monthly mortgage payments, making homeownership more affordable.

In addition to Help to Buy, the Victorian Homebuyer Fund, started in 2021, allows the government to contribute up to 25% of the purchase price in exchange for a share in the property. You only need a 5% deposit (3.5% for Aboriginal and Torres Strait Islander participants, with a 35% shared equity contribution). The scheme covers properties priced up to $950,000 in Melbourne and Geelong or $600,000 in regional Victoria for individuals earning up to $130,485 per year or couples earning up to $208,775 per year. Participants must buy back the government’s share over time through refinancing, savings, or selling the property.

First home buyers in Victoria also have other options, such as stamp duty exemptions and concessions. The First-Home Buyer Duty Exemption or Concession means no duty for homes up to $600,000 and reduced duty for homes $600,001 to $750,000. Off-the-Plan Concessions offer reduced duty for off-the-plan purchases. Pensioner Concessions reduce duty for homes up to $750,000, while Principal Place of Residence (PPR) Concessions reduce duty for homes up to $550,000. Young Farmer’s Exemptions and Concessions reduce duty for first-time farmland buyers.

If you are looking to buy your first home in the next 12 months, contact Kingston Lawyers on 03 9585 6455 to speak to our conveyancing team. We’ll help you understand all the available grants and concessions and handle all the legal details to make your home buying journey as smooth as possible.