Real estate grants and concessions, Victoria: How to save the most

Most Victorian homebuyers would be aware there’s a very handy $45,000 in government grants on offer today, but dig deeper and you can score up to $70,000 in savings and benefits. Find out how.

Sarah Camilleri and Dylan Fichera have just bought their first home, with a hefty $35,000 in government grants. Picture: Mark Stewart

Victorian homebuyers can snag up to $45,000 in grants from the government right now.

But new figures from RPM Real Estate show if you dig a little deeper it’s possible to buy a $750,000 new home with just $21,000 in the bank, claiming a whopping $70,000 in savings and grants.

And that’s before you factor in that developers are negotiating on price and inclusions by up to $15,000.

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Here’s what’s on offer:

● First-home buyers get a $10,000 First Home Owner Grant (FHOG) in Melbourne, or $20,000 in regional Victoria, from the state government if they buy or build a new home for $750,000 or less.

● The federal HomeBuilder grants scheme adds another $25,000 to all homebuyers’ budgets if they build new for $750,000 or less, or renovate an existing home for $150,000-$750,000.

However, they must sign a building contract before December 31 and commence construction within six months. Individuals must not have earned more than $125,000 in the 2018-2019 financial year or since. Households are capped at $200,000.

There are ways to get help buying a home, and not just your first one.

● Victorian first-home buyers don’t pay stamp duty on new or established homes below $600,000 and get a concession up to $750,000, saving them thousands. If you build a new home, duty is only paid for the land.

● Stamp duty concessions apply for all homebuyers who purchase off the plan or spend less than $550,000, and for pensioners who buy at or below $750,000.

● The First Home Loan Deposit Scheme was expanded in the Federal Budget. In addition to 10,000 places to buy an established or new home with an only 5 per cent deposit that is guaranteed by the federal government, saving them thousands in lenders mortgage insurance (LMI), another 10,000 spots are now available for those who build a new home for up to $850,000. Both schemes expire in June and are subject to lender discretion.

HOW FAR AHEAD CAN YOU GET?

Benefits include grants and saved costs

$400,000 townhouse*: $37,682 (from a $11,000 deposit) — OR $45,461 (regional)

$500,000 house and land package: $44,365 (from a $13,750 deposit) — OR $49,238 (regional)

$600,000 house and land package: $52,904 (from a $16,500 deposit) — OR $54,283 (regional)

$750,000 house and land package: $62,541 (from a $20,625 deposit) — OR $70,481 (regional)

$850,000 house and land package: $18,406 (from a $23,375 deposit) — same for regional

*Townhouse purchased with separate land and build contracts

Source: RPM Real Estate

RPM Real Estate crunched the numbers and worked out after paying a 5 per cent, $20,625, deposit for a $412,500 block of land, a Melbourne first-home buyer could wind up $62,541 ahead, via savings and benefits, on their way to building a new home with a $750,000 total value. In regional Victoria the benefit is $70,481.

This includes $35,000 in grants, up to $31,171 in saved LMI and $16,995 waived in stamp duty, minus their deposit.

The grants are extensive enough to pay the 5 per cent deposit required by a bank for the build component, leaving the buyer with a $684,375 government-backed loan and just under 9 per cent equity.

A render of the SOHO Living Oakland townhouse design that will be featured at Thornhill Park estate.

A render showing the SOHO Living Oakland townhouse interior.

But even a $400,000 townhouse purchase could net a first-home buyer $35,719 in benefits.

RPM director Luke Kelly said “there has never been a better time to buy”, but warned going after the HomeBuilder grant now would mean limited choices.

Developers might also be willing to negotiate.

“Any titled land a developer holds on December 31, they will have to pay land tax on,” Mr Kelly said. “If you walk in and offer $5000 less, the developer will probably still talk to you.”

First-home buyers Sarah Camilleri and Dylan Fericho said their decision to build a new three-bedroom townhouse in Thornhill Park, near Melton, had been boosted by the grants.

Sarah Camilleri and Dylan Fichera are waiting for construction to start on their future home, which they hope to move into next year. Picture: Mark Stewart

“I can understand some people might be apprehensive to buy right now, but with a volatile market comes great opportunity,” Ms Camilleri said.

The 21-year-old pair is claiming the $10,000 FHOG and the $25,000 HomeBuilder payment to turbocharge their deposit from $70,000 to $105,000.

Mr Fericho said they’d also been given a range of bonus inclusions often left off the table when building a new home, including landscaping.

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Originally published as Real estate grants and concessions, Victoria: How to save the most