1st HOME BUY TIPS

State Budget delivers extra support for first home buyers

The Cook Labor Government will overhaul stamp duty concessions to help Western Australians buying their first home, with tax cuts to benefit almost 5,000 first home buyers each year and increase the maximum value of the concession to $15,390

Stamp duty concessions increased to help Western Australians buy their first home. Support now available for homes valued up to $600,000, increased from $530,000

First home buyers will pay no transfer duty on homes valued up to $450,000
Reforms will provide total savings of up to $15,390 and benefit almost 5,000 first home buyers each year.

As part of the 2024-25 State Budget, the Cook Government will increase the first home buyers transfer duty concession threshold for established homes from $530,000 to $600,000, and the exemption threshold from $430,000 to $450,000.

This means Western Australians buying their first home will pay no stamp duty on purchases up to $450,000 and will receive a concessional stamp duty rate on properties valued up to $600,000.

Under the new system a first home buyer purchasing a $450,000 property will pay no stamp duty, providing a total saving of $15,390. A first home buyer purchasing a $530,000 home will receive the maximum additional saving of $7,180 under the revised thresholds.

The stamp duty reforms are expected to benefit almost 5,000 first home buyers each year, at a cost of around $20 million per annum.

The changes will apply to agreements entered into from today, 9 May 2024.

This is the first time the property value thresholds for the first home buyer transfer duty concession scheme have been amended since July 2014.

The measure forms part of the Cook Government’s $1.1 billion housing and homelessness package in the 2024-25 State Budget, to boost housing supply and affordability across the State.

The stamp duty concession for established homes is complementary to the State Government’s First Home Owner Grant – which provides a $10,000 payment to first home buyers who are building a new residential property – as well as transfer duty exemptions on vacant land for first home buyers of up to $300,000 and concessions up to $400,000.

Comments attributed to Premier Roger Cook:

“Buying your first home is one of life’s biggest milestones, and I want every Western Australian to have the opportunity to get into a home.

“These sensible changes will deliver real savings for Western Australians looking for their first home, helping to turn the dream of home ownership into reality for thousands of people each year.

“My Government is doing everything we can to make housing more affordable across the State, as part of my commitment to always do what’s right for WA.”

Comments attributed to Treasurer Rita Saffioti:

“This is an important measure to assist first home buyers purchasing a home, especially given the growth in house prices since the property value thresholds for this scheme were last changed in 2014.

“This additional assistance provides targeted relief to first home buyers, supporting them in purchasing a home that will meet their needs. It may also allow first home buyers to move out of existing rental housing, freeing up homes to rent.

“We’re doing everything we can to increase housing affordability in Western Australia, and this initiative is one of many that we are introducing to achieve this.”

Comments attributed to Finance Minister Sue Ellery:

“Legislation to support the increased thresholds will be introduced into the Parliament later this month and I will make a pre-enactment determination allowing the legislation to be applied from when the system changes are implemented.

“This will ensure eligible purchasers benefit from these changes as soon as possible, to help them buy their first home.

“Any first home buyers eligible for the new thresholds who need to pay duty under the previous thresholds at settlement can apply for a refund when the system changes are implemented.”

Property purchase price
Stamp duty payable for first home buyers under current thresholds
Stamp duty payable for first home buyers under new thresholds
Additional savings for first home buyers under new thresholds

Is WA exempt from stamp duty in 2024?
Transactions entered into on or after 9 May 2024: The unencumbered value of the home and land together must not exceed $600,000. No duty is payable if the dutiable value does not exceed $450,000.9 May 2024

How much is the first home buyers grant wa?
$10,000 ~ The first home owner grant (FHOG) is a one-off payment of up to $10,000 for eligible applications from people buying or building their first new home. There are no income or assets tests to qualify for the FHOG. The FHOG is available for the purchase of a new home or a home that has undergone substantial renovations.4 days ago

What is the first home buyer incentive in WA?
The first home owner grant (FHOG) is a one-off payment to encourage and assist first home buyers to buy or build a new residential property for use as their principal place of residence. The grant is $10,000 or the consideration paid to buy or build the house if less than that amount.1 Oct 2024

What are the changes to stamp duty in WA?
no duty will be payable if the dutiable value does not exceed $450,000 (increased from $430,000) and. if the dutiable value is between $450,000 and $600,000, duty will be payable at a rate of $15.01 for every $100, or part of $100, by which it exceeds $450,000 (decreased from $19.19).9 May 2024

How to avoid paying stamp duty WA?
Stamp duty concessions and exemptions in WA
Buy your first home under $450,000 to skip the whole duty, or purchase between $450,001 and $600,000 for the concessional rate.
Purchase or enter into an under construction contract for a new residential unit or apartment off-the-plan before 30 June, 2025.

What are first home buyers entitled to in WA?
The first home owner grant (FHOG) is a one-off payment to encourage and assist first home buyers to buy or build a new residential property for use as their principal place of residence. The grant is $10,000 or the consideration paid to buy or build the house if less than that amount.1 Oct 2024

How much deposit do you need for a first time home buyer in WA?
around 10 to 20 per cent
Typically, you’ll need around 10 to 20 per cent of the value of you home for use as a deposit. A lower deposit might mean that you have to take out lender’s mortgage insurance, designed to protect the lender if you default on the loan.

Can I buy a house with $20,000 deposit?
Some lenders understand this and let you borrow more than 80% of the property’s value. Some will lend you up to 95% – meaning your deposit will be 5%, plus the associated purchase costs. This means that if the property you want is $400,000, 5% of that would be a $20,000 deposit – a bit more doable.

How the First Home Guarantee works
The First Home Guarantee (FHBG) is an Australian Government Guarantee that helps first home buyers or buyers who have not owned a property over the past 10 years to buy a home sooner. You can use the FHBG (individually or as joint applicants) to purchase a new or existing home with a deposit of as little as 5 per cent through a participating lender, helping you avoid Lenders Mortgage Insurance (LMI). What’s more, if you’re eligible to borrow, you can use the FHBG in conjunction with other government programs like the First Home Super Saver Scheme (FHSS) or state and territory first home owner grants and stamp duty concessions.

Eligible property types
Only residential properties are eligible for the FHBG.
These include:
~ an existing house, townhouse or apartment
~ a house and land package
~ land and a separate contract to build a home
~ an off-the-plan apartment or townhouse.

Specific dates and requirements apply for the different property types.

Eligibility criteria
To apply for the First Home Guarantee, you’ll be subject to the following eligibility criteria. You need to be able to provide documentation of your eligibility to secure your position.

Eligibility criteria includes:

~ All applicants can be first home buyers or must not have owned or had an interest in residential property (whether as an investment or owner occupied) in the past 10 years.

~ Individual applicants must have earned less than $125,000 or $200,000 for joint applicants in the last financial year (as evidenced on your ATO Notice of Assessment).

~ All applicants must be at least 18 years of age and have a valid Medicare card (or Defence ID).

~ All applicants must be Australian citizens or permanent residents with either a valid Australian passport, proof of Australian citizenship or proof of Permanent Residency.

~ Applicants must have a deposit of between 5 per cent and 20 per cent of the property’s value.

~ Applicants need to be owner occupiers of the purchased property. FHBG does not support investment properties.

~ Your purchased property must be an acceptable property type and within the property price threshold for the suburb and postcode. You can check the property price cap for your area on Housing Australia., opens in new window

~ In case you’re eligible for the Regional First Home Buyer Scheme (RFHBG) or the Family Home Guarantee (FHG), you won’t be eligible for the FHBG.

Loan requirements and term limit

With a home loan under the FHBG, you’ll need to make scheduled repayments of the principal and interest of the loan for the full loan term. Limited exceptions are available for interest-only loans, relating mainly to construction lending.

The loan agreement must have a term of no more than 30 years.

How to apply…

There are four steps to apply for 1st Home Guarantee

[1] Check your eligibility:
Use the factsheet and information guide section to check your eligibility.

[2] Get in touch:
Book an appointment online, at your local branch or with your broker and complete your NAB home loan application.

[3] Submit your application:
Get conditional approval from your banker or broker. They’ll then collect the documents required for eligibility and reserve your place in the Scheme.

[4] Buy your home:
You’ll have 90 days to purchase a home after you’re approved in the Scheme, then all you need to do is settle and move in.

Fact sheets and information guides
For more information about your eligibility for the First Home Guarantee, especially price thresholds that apply for your state, refer to:

All about the First Home Owner Grant
The First Home Owner Grant (FHOG) WA is a one-off payment funded by the Government of Western Australia and administered by the Department of Finance, Office of State Revenue. The grant is available to assist first home buyers to get started with their first home. The FHOG in Western Australia only applies to first home buyers who are building or purchasing a newly built home.

Keystart
Allows you to use the FHOG funds towards your home loan deposit, to help you get started on your home ownership journey sooner. So, the FHOG is not paid directly to you. If you wanted to receive the FHOG grant directly, then you would need to save your deposit yourself.

FHOG is no longer available if you choose to buy an established home, however you may be eligible for the Home Buyers Assistance Grant towards minor expenses.

There are benefits to buying an established home too – you may find it useful to read our guide to building or buying an existing home.

Am I eligible for FHOG?
The first criteria to be eligible for FHOG is that you need to be a first home buyer. If you, or your partner or spouse, has previously owned a home, you won’t be eligible. There are some other criteria – you can read more on the Office of State Revenue website.

How we process your first home owner grant
For Keystart customers, we allow you to use the FHOG funds towards your deposit. To make this happen, we advance (pay on your behalf) an amount equivalent to the FHOG to your settlement agent to be available at settlement. This is done before the Office of State Revenue has actually released the funds. This amount will be shown as a debit in your home loan account.

Depending on your situation, these funds can also be used to cover Keystart’s fees and even your settlement agent fees. Don’t worry – your broker or Keystart Home Loan Specialist will go through the fees with you and will let you know what you may be required to cover well before settlement.

Later, when the first invoice has been paid to your builder, the Office of State Revenue will pay the FHOG grant to Keystart. If you are buying a newly built home the Office pays the grant after settlement. These funds will then be credited to your loan account.

So in effect, these funds are added to your home loan balance when we advance them (shown as a debit), and then once the FHOG has paid to Keystart, that amount is taken off your loan balance (shown as a credit). You can see this activity in your loan statement.

Let’s look at a couple of examples:
Sarah is getting a new home built. She is eligible for the FHOG, which means those funds will be used towards her deposit and some of the costs of settlement. Keystart advances these funds to Sarah’s settlement agent to be available for settlement. That advance is shown as a debit on her loan balance.

Once her home reaches the first invoice stage, the Office of State Revenue pays the FHOG funds directly to Keystart. We process that as a credit back onto Sarah’s loan balance.

Sarah’s home loan account transactions (simplified example)
– FHOG advance -$10,000
– Land amount – $200,000
– Balance -$210,000
– Builder’s first invoice: $60,000 -$60,000
– Balance -$270,000
– Office of State Revenue FHOG payment $10,000
– Balance -$260,000

Tom’s home loan account transactions (simplified example)
Tom is buying a newly built home and is eligible for the FHOG.
– FHOG advance -$10,000
– Settlement funds – $400,000
– Balance -$410,000
– Office of State Revenue FHOG payment $10,000
– Balance -$400,000

• Note these are simplified versions of a loan account for illustration purposes only. These figures do not take into account interest or additional transactions.

Completing the FHOG Application
First, you need to advise us if you think you’re eligible for the FHOG. Then, once you’re at your pre-approval stage, you’ll receive a FHOG application from your broker or your Keystart Home Loan Specialist.

This form will need to be completed, signed and witnessed and either the original or a certified copy of the form returned to Keystart.

We will then lodge your FHOG application electronically to be approved by the Office of State Revenue.

Interest on FHOG
For you to be able to use the FHOG funds towards your deposit, we advance the grant amount from your loan account to your settlement agent. Since we are advancing this money on your behalf, we charge interest on the advanced amount until we obtain your grant funds from the Office of State Revenue.

Once Keystart has received the FHOG funds, we consider the advance amount to be paid off, so you will no longer pay interest on this component.

You should expect your grant funds to be credited to your Keystart account approximately two weeks after the first progress payment is made to your builder. If you’ve purchased a newly built home, you should expect this to occur approximately two weeks after settlement.

When the funds come back into your loan account you’ll see a credit for the FHOG amount. These funds are not available for redraw, for loan repayments or to be used towards any additional costs but are treated as a permanent reduction against the loan balance.

Keystart recommends that you seek your own independent financial advice prior to making any decisions about your financial needs. Any examples given are provided for illustrative purposes only.

Stamp duty concession for first time home buyers
If you’re a first home buyer, a concessional rate of transfer duty (also referred to as stamp duty) will apply if the value of your property is below certain thresholds. This is an incentive from the State Government to encourage first home buyers to get into their own home. This benefit applies to new and established homes.

Different rates apply depending on whether you buy a new home, an established home, or a house and land package.

You can calculate the amount of duty payable by using the
Department of Finance’s Transfer Duty Calculator.

Am I eligible for the stamp duty concession?
To be eligible for the stamp duty concession you’ll need to be a first home buyer. If you, or your partner or spouse, has previously owned a home, you won’t be eligible. There are some other criteria – you can read more on the Office of State Revenue website.

You’ll need to complete a First Home Owner Grant application to apply for the stamp duty concession. This also applies if you are buying an established home.

More info at the Office of State Revenue

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