Avoid These 4 First Home Buyer Number Mistakes

Four sets of numbers decide how far a first home buyer in Sandringham can stretch, and most of them are fixed by government thresholds.

Between work, family and weekends at open homes, you don't have time to read every government page. So here are the figures that matter for Victorian buyers, and what each one means for your plan. The numbers below are for Victoria, because that's where Sandringham sits.

What Victorian Stamp Duty and Grant Thresholds Should First Home Buyers Know?

In Victoria, a first home buyer pays no land transfer (stamp) duty on a dutiable value up to $600,000, gets a concession from $600,000 up to $750,000, and pays standard rates above $750,000. The exemption and concession apply to established homes, new homes and vacant land, and the benefit can be claimed once.

The $10,000 Victorian first home owner grant is narrower. It applies only to new homes that have never been sold or lived in, with a dutiable value up to $750,000. It does not apply to established homes.

Both come with a residence rule. For the stamp duty benefit and the grant, you must live in the home as your principal place of residence for at least 12 months, starting within 12 months of settlement or completion. If you are buying an established home, the duty exemption is the main benefit to check. If you are buying new, you may be able to use the grant as well.

Our first home buyers page covers how these fit into a full purchase plan.

How Does the 5% Deposit Scheme Change Your Deposit Number?

Under the Australian Government 5% Deposit Scheme, eligible first home buyers can buy with a 5% deposit and no Lenders Mortgage Insurance (LMI). Housing Australia backs the lender for the part of the loan between your deposit and 20% of the property value. There are no income caps and no limit on places.

The trade-off is the price cap and the occupancy rule. In Victoria, the cap is $950,000 for Melbourne and Geelong, and $650,000 for other areas. Both the purchase price and the home's value as assessed by the lender must be at or below the cap. The cap that applies depends on the suburb and postcode in Housing Australia's postcode search tool, so check the property's exact postcode before you fall in love with it.

You must move in within six months of settlement and keep living there while the backing is active. If you move out early, the lender may require you to pay LMI. Applications go through a participating lender only. This is where a broker helps, because we can compare which lenders on the panel suit your income and savings.

Who Qualifies for Help to Buy Under the Income Thresholds?

Help to Buy is a shared equity scheme where the Australian Government contributes 5% to 30% of an existing home's price, or up to 40% for a new home, in exchange for an equity share. For 1 July 2026 to 30 June 2027, the income limits are $103,000 for a single applicant and $165,000 for a single parent or joint applicants.

Income is assessed on the taxable income shown on your latest Notice of Assessment. Housing Australia has no power to override it, even for a one-off bonus or redundancy payment. You also need at least a 2% deposit from savings, and a lender must approve your home loan first.

Housing Australia's own example shows how it works. A $750,000 home in Geelong, a $50,000 deposit and $550,000 of borrowing capacity leave a $150,000 gap. The Government fills it with a 20% share, so the buyer avoids LMI and makes no monthly repayments or interest payments on that share.

The trade-offs are real. The Government's share rises and falls with the home's value, and your income is reviewed at least every five years. If it stays above the threshold for two years in a row, you may be asked to repay part or all of the share once you can afford to. Only a small group of lenders offer the scheme, and you can't combine it with other shared equity or loan backing schemes. You can still use first home owner grants and stamp duty concessions.

Get conditional approval before you bid or pay a deposit. Housing Australia advises against bidding at auction without it. You can find out where you stand with our borrowing capacity calculator.

How Much Can the First Home Super Saver Scheme Add to Your Deposit?

The First Home Super Saver scheme lets you release voluntary super contributions towards a first home deposit. Up to $15,000 a year and $50,000 in total of voluntary contributions count towards release. You can release 100% of after-tax contributions and 85% of before-tax contributions, plus associated earnings.

As an example, consider a Sandringham couple who each salary sacrifice $15,000 in one financial year. Each person's maximum release is 85% of that, or $12,750, plus associated earnings. Together that is $25,500 before earnings, and the ATO withholds tax on the amount released. Because each person is assessed individually, they can both use the scheme for the same home.

Their next step is to ask the ATO for a determination, then request the release. This takes the ATO and the fund around 15 to 20 business days in most cases. They must do this before ownership of any property transfers to them. The released amount is taxable, so they should speak to their accountant about how it will affect their tax return. They must also sign a contract to buy or build within 12 months of the release request (or any further period the ATO allows) and notify the ATO within 90 days of signing. Alternatively, they can recontribute the assessable amount, less tax withheld, and notify the ATO within 12 months. If they do neither, or don't notify the ATO, FHSS tax of 20% of the assessable amount applies on top of income tax.

The trade-off is that only one release request is allowed. A request can be cancelled or amended only before the ATO starts processing it. After release, you must either sign a contract to buy or build or recontribute, and you can't use the scheme again.

Once you know your deposit, see what repayments could look like with our mortgage repayment calculator. As an illustration only, a rate of 6.75% p.a. is a reasonable test figure.

If you want to talk through which of these schemes fit your situation, our Sandringham mortgage broker team can run the numbers with you. Call one of our team or book an appointment at a time that works for you.

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