Government Grants and Schemes for First Home Buyers

The Government Support Actually Available to Melbourne Buyers

Getting into the Melbourne property market feels like a big step, and you're probably wondering what help is available to make it happen sooner. The Victorian and Federal governments offer several schemes that can reduce your deposit requirement to as low as 5%, eliminate Lenders Mortgage Insurance, and provide cash grants of up to $10,000 depending on where you buy.

The most important thing to know is that these aren't one-size-fits-all programs. Each scheme has specific eligibility requirements around income, property price, and location. Understanding which ones you qualify for can mean the difference between needing a $90,000 deposit and getting started with $30,000.

First Home Owner Grant in Victoria

Victoria offers a $10,000 First Home Owner Grant for buyers purchasing or building a new home valued up to $750,000. This applies to newly built homes, including off-the-plan apartments, townhouses, and house and land packages. The grant doesn't apply to established properties.

Consider a buyer looking at a new townhouse in Wyndham Vale priced at $620,000. They receive the full $10,000 grant, which goes directly toward their purchase costs or deposit. Combined with stamp duty concessions available on properties under $600,000, this buyer might pay no stamp duty at all. The grant reduces the cash they need upfront, making the purchase achievable months or even years earlier than it would be for an established home in a similar location.

You need to move into the property within 12 months of settlement and live there for at least 12 continuous months. The property must be your principal place of residence, and you can't have previously owned residential property in Australia. You can learn more about qualification requirements on our first home owner grants page.

The First Home Guarantee and Regional Variants

The First Home Guarantee lets eligible buyers purchase with a 5% deposit without paying Lenders Mortgage Insurance. The government guarantees up to 15% of the property value, which means lenders treat your application as though you have a 20% deposit. This applies to properties up to $800,000 in Melbourne.

The Regional First Home Buyer Guarantee works the same way but applies to properties outside major cities, with a price cap of $600,000 in regional Victoria. Suburbs like Geelong, Ballarat, and Bendigo fall under this scheme. The regional version typically has more available places each year because demand is lower than in Melbourne.

In our experience, buyers often assume they need to save a 20% deposit before they can purchase. A couple earning a combined income of $110,000 looking at a property in Craigieburn for $580,000 would need $116,000 plus costs under traditional lending. Under the 5% deposit scheme, they need $29,000 plus costs and avoid paying around $15,000 in Lenders Mortgage Insurance. That's the difference between buying now and waiting another two or three years to save.

Stamp Duty Concessions for Melbourne Buyers

Stamp duty concessions in Victoria work on a sliding scale. For first home buyers purchasing established homes valued up to $600,000, you pay no stamp duty. For properties between $600,000 and $750,000, you receive a reduced rate. For new homes and off-the-plan purchases, the concession applies up to $1,000,000 with full exemption under $550,000.

These concessions stack with other schemes. A buyer purchasing a new apartment in Footscray for $540,000 pays no stamp duty, receives the $10,000 grant if eligible, and can use the First Home Guarantee to purchase with a 5% deposit. That's around $37,000 in combined government support before considering the LMI waiver.

The property price caps mean location matters significantly. Inner suburbs like Richmond, Carlton, and South Yarra have median prices well above the concession thresholds. Outer suburbs like Werribee, Melton, Pakenham, and Cranbourne offer more properties within the qualifying price range. You're not locked out of inner areas, but you'll likely be looking at apartments rather than townhouses or houses to stay within the caps.

The First Home Super Saver Scheme

The First Home Super Saver Scheme lets you make voluntary contributions to your superannuation fund and later withdraw them to use as a house deposit. You can contribute up to $15,000 per year and withdraw a maximum of $50,000 plus earnings. The advantage is that super contributions are taxed at 15% rather than your marginal tax rate, which could be 32.5% or higher.

This scheme suits buyers who have steady income but struggle to save outside of super because of living expenses or existing debts. You need to plan ahead because the contributions must be made over at least two financial years. Someone earning $85,000 who salary sacrifices $15,000 into super saves around $2,600 in tax compared to saving the same amount in a standard savings account. Over three years, that's an extra $7,800 toward your deposit just from the tax treatment.

You apply through the Australian Taxation Office to release the funds once you're ready to purchase. The withdrawn amount must be used for a deposit within 12 months of release. The scheme works well in combination with government guarantees because you can build your 5% deposit faster while paying less tax along the way.

Choosing Between Schemes and Stacking Support

Most buyers qualify for multiple forms of support at once. The question becomes which combination gives you the most benefit based on your income, savings, and the type of property you want. Someone buying a new home under $750,000 in outer Melbourne could access the First Home Owner Grant, stamp duty concessions, and the First Home Guarantee simultaneously.

The income caps for government guarantees sit at $125,000 for individuals and $200,000 for couples. If you earn above that threshold, you can still access stamp duty concessions and the First Home Owner Grant on eligible properties, but you'll need to save a larger deposit or pay Lenders Mortgage Insurance to borrow above 80% of the property value. Our first home buyers page outlines how income affects your options.

Getting pre-approval before you start attending auctions or making offers helps you understand exactly what you can borrow and which schemes apply to your situation. Lenders assess your income, expenses, existing debts, and deposit source. Having that clarity means you can focus on properties within your confirmed budget rather than guessing what might be possible.

Making Your Government Support Work in Melbourne

The Melbourne market moves quickly, particularly in suburbs where first home buyers compete with investors and upgraders. Knowing your eligibility upfront and having your deposit ready, including any government grants you qualify for, puts you in a position to act when the right property appears.

Many buyers also use gifted deposits from family to reach the 5% threshold. Lenders accept genuine gifts as part of your deposit, provided they come with a signed declaration that the funds don't need to be repaid. This can be combined with the First Home Guarantee and other schemes to get you into the market sooner.

Call one of our team or book an appointment at a time that works for you. We'll walk through your specific situation, confirm which schemes you're eligible for, and show you what your deposit requirement actually looks like once government support is applied. You might be closer to buying than you think.

Frequently Asked Questions