For first-time home buyers in QLD, getting into the marketing can seem almost impossible as we head into 2024.
At Zest Mortgage Solutions in Brisbane, we understand, We've helped hundreds of first home buyers take advantage of the established, and latest Queensland government grants.
The difficult part for first-time buyers, is figuring out which government grants you are able to claim. There are national schemes and also local Queensland grants, so it can be overly confusing to know if you are eligible home buyers for these grants.
Please note: If you would just prefer to chat with an expert home loan team, please just give us a call on (07) 3461 6499 or get in touch here - it could save you many frustrating hours 😊
Let's get into it then, grab a cuppa!
What is the First Home Owners Grant in QLD?
Before it was called the First Home Owners Grant, it was called the First Home Buyers Grant. Either way, it's a one-time cash payment of $15,000 from the Queensland Government (to eligible applicants) to help pay for a new home.
This initiative has been running for a few years, and despite speculation that it will soon end, the Queensland State Government has not announced an end date.
Basically, when the Government makes the state budgets each year, they decide whether to keep the Grant or not. For 2024, the grant appears to be staying - but please don't quote us on that.
Note: We (the Zest team) can apply for this grant on your behalf if you like.
What is the First Home Guarantee?
Additional to the First Home Owners Grant, The First Home Guarantee is another Government incentive that allows first-home buyers to buy their first home with a deposit as low as 5%, without the need to pay Lenders Mortgage Insurance (LMI).
LMI is an insurance policy and payment that protects the lender, in case you default (can't pay) your home loan repayments. It is usually applicable when borrowing over 80% of the value on the property, or in other words, you don't need to pay it if you have over a 20% deposit.
If you are interested in the First Home Guarantee, please just get in touch here.
The challenge with the QLD First Home Owners Grant
However real problem in our opinions, that the grant is for people who are building their first home or buying a brand new home that has never been lived in before.
Now while this includes houses, units and townhouses, even if they have strata as long as the building is new, this first home owners grant is available.
This makes it tricky for many first home buyers who work in the Brisbane CBD, as it often means living a little further out and having to commute - or buying a flat or townhouse as those are more common as we get closer to the Brissy CBD.
In West Brisbane here at Springfield, we are lucky to have new developments that are commutable, so please just contact us if you are looking for a house in commute distance to the CBD - we work with lots of local real-estate agents and know what developments are coming up.
How much deposit do I need for a house & land package?
When looking specifically at home and land packages, the second thing you might be wondering, is, can I use the $15,000 First Home Owners Grant as part of my down payment on a new house?
The good news, is yes, you can use this money for your deposit!
And that is the idea that the government had in mind, that you should be able to achieve your savings or deposit goals faster with the $15,000 grant under your belt.
Because when it comes to your deposit and building costs, a good guide is a deposit of 7% to 8% of the total cost of the land and building costs on a new-build property.
This first-home deposit guide is based around:
So while the Federal Government allows eligible first home buyers to buy or build their first home with as little as a 5% deposit, you really do need a little more to be on the safe side with other expenses. Here is a run down.
5% - Absolutely the minimum deposit amount.
2% to 3% for buying costs, which include other fees.
These other fees include government stamp duty (if relevant), transfer fee and mortgage registration fees; and costs including the solicitor/conveyancing fees and building inspections.
Of course, the more deposit the better, and we would suggest booking a Free 15 minute call with the Zest team to work out the ideal deposit for your savings and lifestyle you want.
How much deposit do I need for a flat or townhouse?
As a general rule of thumb, also aim for 7% - 8% deposit, although the expenses are little simpler then buying land and a home build, as you essentially have one cost.
Again, please just contact the Zest Mortgage Solutions team for a chat around the kind of home you are looking to buy, and location, as a few minor details can make all the difference. You can also have a look at our Loan Repayment Calculator to get an idea of what your loan would look like.
How much can you spend on a property under the First Home Guarantee?
The maximum amount you can spend on a property under the First Home Owners Grant is $700,000 in the Brisbane, Gold Coast and Sunshine Coast regions on a new home. This is actually $750,000 with extras like solar and fencing, as well as the new HomeBuilder grant of $15,000. However, for first time home buyers, this amount can be increased to $780,000 with the First Home Guarantee. This additional grant is only available for the purchase of new-build properties or for people who are building their own property. It is important to note that there may be additional obligations and restrictions for the HomeBuilder grant, so it is best to consult with an approved agent for more information. For many first-time buyers, these grants can make a significant difference in being able to afford their own home.
For other Queensland areas, the price cap is $550,000.
This does not include solicitors and any fees with the application process (thankfully mortgage brokers like Zest are Free 😊, and for most first-home buyers, cases, there is stamp duty relief available which provides great savings on stamp duty too.
How does the First Home Owners Grant work if I buy land first?
Buying your land first might be something you want to look into, especially if you don't plan to build straight away. Of course the first step is getting the block of land valued to check that your land purchase is an investment.
Here is the process for buying you home and land seperate:
Step 1: Get a loan to buy the land
If the piece of land costs $300,000, you need to save at least 5% ($15,000 is 5% of $300,000) as a down payment, plus another 2% to 3% for the fees of buying it.
As a guide, allow around $25,000 for your land as a first home buyer.
But keep in mind, the First Home Owners one-off grant is not available to be used for blocks of land, so you can't use the $15,000 grant as a part of this deposit.
However, you may be able to get a stamp duty concession on your block of land. This gives you up to $7,175 as a rebate, if you meet the criteria.
Step 2: Get a loan for the home build
Once you've secured your block of land, the next step is finding a reputable builder and signing a building contract, which covers the cost of building your new home and the entire construction process, including any contract variations. This can be a seriously daunting process, with so many horror stories around building in 2023, due to the increasing value of the land and the cost of materials rising significantly, leading to some builders going out of business.
Taking it step by step is key to avoid signing a building contract that bites you in the bum later - for lack of a better term.
The good news is, this is where the $15,000 First Home Owners Grant can be used as part of your deposit.
Just keep the overall costs in mind, as the maximum amount you can spend under the First Home Owners Grant is $750,000 in the Brisbane, Gold Coast and Sunshine Coast regions on a new home.
So if your land costs $350,000 is Brisbane, your home build can't be over $350,000.
For other Queensland areas, the price cap is $550,000.
In these cases the home build could cost a little more, so you need to be savvy with your land purchase.
Of course when buying a flat or townhouse, there is only one cost as the land is owned by the strata - so it is a little different and actually a fair bit easier.
What to consider when getting your First Home Owners Grant?
The dream of homeownership should be more than a dream - it should make sense on a spreadsheet too.
Lenders, including the major banks are of course run by financials, and when they are lending you money, especially large amounts for a first-home loan, they want to make sure they get their money back.
We have access to over 60 lenders and we work for you, not the banks. So we can give you real advice on not just the benefits of homeownership, but also what you need to avoid.
Am I eligible in 2024 for the First Home Owners Grant in QLD?
Chances are, that if you have the right deposit and are truly a first home buyer, then yes will be eligible for the QLD First Home Owners Grant. There are a few eligibility checks however that you must do, or work with Zest to help you get these done - these checks are: further information about eligibility criteria can be found here.
- No prior property ownership in Australia.
- You must be over 18 at the time you apply for the grant.
- You must be an Australian citizen, or permanent resident.
- You must be buying off the plan or buying a brand new home that's never been lived in.
- The property purchase price of the land + build must be under $700,000 ($750,000 with extras).
- You must move into the home within 1 year of the final inspection
- You must live in the property continuously for at least 6 months.
What can disqualify you from getting the QLD First Home Owners Grant?
If you have your deposit and a good credit history etc (We can pre-approve you to ensure you meet the minimum repayments or loan repayments), then the main reasons you would disqualify are below.
One area that catches a lot of Australian first home buyers out, is those who inherited property from their parents or grandparents, and even if the property was split with you and your siblings and quickly sold, you may not qualify as you have previously owned property in theory.
If you have inherited part of a home or building previously, please talk to us before you go through the grant application process.
- You are a trust or company (i.e. not an individual);
- The new property (home and land) is not valued at $750,000 or more with the extras.
- You enter into an arrangement to get the Grant, but don’t use it to buy a new home.
- You held an interest in residential property before 1 July 2000, regardless of how the property was used.
- You or your partner are not aged over 18.
- You move into the home after one year.
- You live in the home for less than 6 consecutive months, which indicates the grant was given to you for investment purposes more than a home owner grant.
What is the QLD Regional Home Building Boost Grant?
The Regional Home Building Boost Grant is a valuable initiative that provides eligible applicants with a $5,000 grant following the purchase or construction of a new home, unit, or townhouse in regional Queensland. This grant aims to stimulate the housing market in regional areas and encourage individuals to invest in properties outside major cities.
By offering financial assistance to prospective homeowners, the grant not only supports the property market and local real estate industry but also contributes to the growth and development of regional communities. Additionally, this incentive can help make homeownership more accessible as there are a lot more vacant land options in regional areas, and it's more affordable for first home buyers looking to settle down in regional Queensland housing areas.
You can find more information here on this unique regional first homeowners grant.
Understanding Your Savings and Spending Habits.
One of the biggest factor for lenders, is of course, your savings and spending habits.
Lenders favour first home buyers who have a history of regularly saving and paying off debt, as it shows you can do this for the next 25 or 30 years and the banks investment is in safe hands.
Please note: If you would just prefer to chat with an expert home loan team, please just give us a call on (07) 3461 6499 or get in touch here - it could save you many frustrating hours 😊
You then make an offer on the block of land, and we apply for the loan on that block of land.
At the same time we apply for a ‘Fully Assessed Home Loan Pre Approval’ to ensure we can get the loan for the ‘construction of your home’ as well.
Once you sign a building contract, we can apply for the loan to pay for the build.
This approach gives you some re assurance (albeit not 100% certainty) that you can afford to build the home! We want to avoid the situation where you buy the land but the bank won’t lend you money for the build.
Why pre-approval matters for QLD first-home buyers.
When you are buying a new home, as a first home buyer of your fifth home, pre-approval makes all the difference.
A good Mortgage Broker like Zest will be able to complete an ‘Informal Home Loan Pre Approval’ which is where you get the benefits without the downsides of applying for a home loan and getting potential rejection.
What are the grants available for First Home Buyers in Queensland?
Heading into 2024, there are currently three main schemes you may be able to access when building or buying your first home in QLD.
You could be eligible for one, or all three of these.
Grant number 1:
The First Home Buyers Grant, the $15,000 grant to help with the cost of the build. Spend below $700,000 on build + land and up $750,000 with approved extras like solar.
Grant number 2:
You can also apply for the Stamp Duty Rebate $7,175 Saving on Stamp Duty to be paid on land. To be eligable, you will need to spend below $400,000 on land.
Grant number 3:
The First Home Guarantee allows you to build with a 5% deposit without paying LMI. This can save you thousands a year and help you get into your first home much faster with this loan deposit scheme.
Grant number 4:
The Regional Home Building Boost Grant is a valuable initiative that provides eligible applicants with a $5,000 grant following the purchase or construction of a new home, unit, or townhouse in regional Queensland.
How do you apply for the First Home Owners Grant yourself?
The good news is, you don't need to go it alone. Whoever is helping you with your home loan is the entity that applies for your Grant, be it a bank directly or your local Mortgage Broker.
A mortgage broker like Zest is by far the fastest, and by far the most convenient way to have your grant paid. But, you can also apply directly yourself through the QLD Office of State Revenue.
The application form is only fifteen pages long, with seven main sections that cover:
Section 1: Eligibility Criteria
Section 2: Applicant Details
Section 3: Spouse Details
Section 4: Property and Transaction Details
Section 5: Optional Information
Section 6: Declaration by Applicant
Section 7: Declaration by Spouse
What supporting documents do I need to provide with my application?
You will always need to provide ID documents plus the paperwork for your land and building contracts or purchase contract. And you might have to supply supporting documents too like your birth certificate, marriage certificate, passport and proof of citizenship.
Does my income matter to get the $15,000 First Home Owners Grant?
No your income does not matter - there are no income tests to get the $15,000 First Home Buyers Grant. You will of course however need to meet the lenders or banks lending critera to get a home loan approved before the $15,000 is supplied.
Does my income matter for the First Home Guarantee
Yes, with this grant there is an income test to get the 5% LMI waver. Singles will need to have a taxable income less than $125,000 per annum, and couples less than $200,000. This figure is based on your prior financial year - and you will need to provide a Notice of Assessment from the ATO for this grant.
First Home Guarantee joint applications
Prior to July 1 2023, couples could only allowed to apply if they are married or in a de-facto relationship. From 1 July 2023, any two eligible people may apply together, including friends, siblings or other family members are able to apply, which is a great way to open up the 1st home buyers grant qld to more Australian first home buyers.
First Home Guarantee and prior property ownership
To be eligible, and like the First Home Buyers Grant, you must not have not owned or held any interest in property in Australia in the past ten years - and this include property that you've inherited, commercial property, company title properties or any investment properties in general.
First Home Guarantee and Australian Citizenship
Prior to 1 July 2023, First Home Guarantee applicants must be Australian Citizens that are aged 18 years or over. From July 1 2023, the scheme was changed and available to eligible borrowers who are Australian Permanent Residents too, making the Queensland 1st home buyers grant even more beneficial for more first time home owners. Just remember the rules around the first home owners grant qld established homes.
First Home Guarantee Owner Occupied Laws
Like the 1st home buyers grant QLD, you need to move into the property within six months (not 12 months) of owning your home and continue to live in that property for so long as your home loan has a guarantee under the Scheme.
First Home Buyers Grant FAQs
Q. What if I move out of my home in less than the 6 months?
In this case, you will likely need to repay the Grant money back to Office of State Revenue. We suggest that you call the Office of State Revenue before making any decisions, or chat to your Mortgage Broker about the full terms of your Queensland 1st home buyers grant. Be sure to see the latest information here: https://www.publications.qld.gov.au/dataset/first-home-owner-grant-guide
Q. Can I get the Grant if the property is to be rented out?
No, for the First Home Buyers Grant you must live in the home for at least 6 consecutive months before renting it out or using it as any kind of investment property. This means that the property must be your principal place of residence for the first 6 months after the completed transaction and after receiving the final inspection certificate.
. The Queensland 1st home buyers grant has some very strict requirements, including residency requirements and time of completion, so it is important to consult with Zest Mortgage Solutions for more information.
Q. Can I rent out a room in my new house to help with the repayments?
In this case, you will need to check with the QLD Office of State Revenue to discuss your specific circumstances, you can reach them on 1300 300 734. Please call them first, otherwise you might find yourself needing to repay the $15,000 Grant.
Q. I am buying with a partner, do we both get the Grant?
No, in this case only one person can receive one payment of $15,000 for the grant. To see how to apply and how you and your partner may be eligible for individual grants, please see here: https://qro.qld.gov.au/property-concessions-grants/first-home-grant/apply/ https://www.nhfic.gov.au/what-we-do/fhlds
Q. I am buying with a partner and they owned a home before, can we still get the Grant?
This really depends on a lot of factors, and if you are in this situation, please call the Zest Mortgage Solutions team on (07) 3461 6499. It really depends on your individual situation.
Q. I have owned a home overseas before, can I still get the Grant?
The QLD Office of State Revenue states in their terms, that you must not have owned Australia property before - it does not specifically say anything about owning overseas property. Frankly, it's a grey area so it's best to give us a call or contact us here to discuss your situation.
Q. What if I have owned an investment property that I've never lived in?
Maybe, there are some exemptions available when applying for the 1st home owners grant Queensland. Be sure to speak to the QLD Office of State Revenue or call the Zest team so we can follow it up for you as you would not want to presume this money is available if it's not. If you have previously owned an investment property that you have never lived in, you may still be eligible for the Queensland first home owner grant and transfer duty concession. Be sure to check with the Queensland Revenue Office for more information.
Q. Can I use the $15,000 Grant as a land deposit?
No, the $15,000 Grant can only be used to build your home or on a deposit for your apartment or townhouse. You need enough savings to buy the land as part of your home ownership.
home building boost grant
Q. UPDATED: Can you get first home owners grant on existing homes in Qld?
As of the latest legislation, the FHOG in now available in QLD if you buy from the plan, and now also possible on homes that have been substantially renovated or through an off-the-plan purchase. This is still a little grey so it's again best to check with your local mortgage broker to make sure you are legible for the 1st home buyers grant QLD. However, it is important to note that cosmetic work such as painting or sanding floors does not count as a substantial renovation when it comes to the FHOG in QLD.
How do I calculate the entire build cost of a new home?
Calculating the entire build cost of a new Queensland home involves considering various factors. Here's a general overview of the components to consider:
- Construction Costs: This includes the cost of materials, labor, and any subcontractor fees. You can obtain quotes from builders or use cost estimation tools to get an idea of the construction cost. If you are buying a home off the plan, be sure you have a full list of inclusions - these can be quite tricky to understand in a lot of home packages.
- Land Costs: If you haven't purchased the land yet, you'll need to factor in the cost of the land if it doesn't come with a house and land package.
- Legal Fees: Legal fees can include conveyancing fees, which are the costs associated with transferring the legal ownership of the land to you. These fees can vary depending on the complexity of the transaction and the solicitor or conveyancer you choose. If you need some cost-effective recommendations, just contact the team at Zest!
- Stamp Duty: Stamp duty is a tax imposed by state governments on certain transactions, including property purchases. The amount of stamp duty varies depending on the value of the property.
- Insurance Costs: Building insurance is essential to protect your investment during the construction phase. This insurance typically covers damage to the building caused by events such as fire, storm, vandalism and the big one in Queensland, flood insurance.
- Council Fees and Permits: You'll need to obtain various permits and approvals from the local council before construction can begin. These may include planning permits, building permits, and other fees.
- Contingency Fund: It's advisable to set aside a contingency fund of around 5-10% of the total build cost to cover unexpected expenses that may arise during construction. A lot of people get caught out without a fund, especially with materials costs always on the rise.
Can I get help with all of this?
Absolutely, by consulting with a mortgage broker in QLD we can explain everything simply, and help you navigate the loan process and government schemes more effectively before applying with a financial institution or other loan providers - which we can also do on your behalf.
Simply book a meeting online here or get in touch with our team here or on (07) 3461 6499. We are beloved Mortgage Brokers in Brisbane Queensland, and we're here to help you with your first home buyer grant! We’ve also offices in Springfield, Ipswich & Flagstone - but help clients all across Brisbane & Queensland!
