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First Home Buyer Grants for Single Parents in Australia

September 24, 2021

Owning a home is a dream for many Australians. Sadly, with a single income and dependants to care for, the ballooning property prices can sometimes lock single parents out of the property market. The government has offered a lifeline to single parents across Australia through the Family Home Guarantee Scheme. The scheme will run over four financial years, from January 2021 to June 2025. Let's take a closer look at what this first home owners grant has to offer.

What Does the Family First Home Owner Grant Guarantee Scheme Cover?

The Family Home Guarantee Scheme is a home owners grant scheme to help single parents purchase homes. Under the scheme, the Australian government will avail 10,000 guarantees on deposits to single-parent families to buy a residential property in the country. Beneficiaries of the first home owner grant for singles will be able to build or buy new homes with deposits of no less than 2%. The scheme will work in a similar way to the First Home Loan Deposit Scheme. Instead of putting up 5% under the Family Home Guarantee Scheme, you’ll only be expected to raise 2% for deposit. The government will guarantee the remaining 18% obligation. The scheme also helps single parents to get a full exemption on lender’s mortgage insurance.

Who Qualifies for a First Home Owner Grant for Singles?

To qualify for this grant, you have to be a single parent over 18 years of age. You must prove that you’re a natural parent or have legally adopted your child in compliance with the Social Security Act of 1991. You’ll also be required to prove that you’re responsible for the care of your child. Note: If you’re separated but not divorced, you won’t be eligible to apply for this home owner grant. Some of the basic eligibility requirements include:
  • You must be an Australian citizen. You won’t be considered if you’re a permanent resident or have applied for a permanent residency permit.
  • Your taxable income must be less than $250,000 per annum. If you receive child support, it won't be added to your aggregate income.
  • As a single parent, only your name must appear on the home loan and the property’s title.
  • Your child must be a dependant. Under Australian tax law, a dependant child should be under 21 years old. If your child is between 21 and 24 and you can prove that they’re a full-time student, they’ll also be considered legally dependant.
  • You shouldn’t currently own a home to qualify for this home owner grant. However, it doesn’t have to be your first time buying a home. If you’ve previously owned property, you can still qualify as long as you can prove you’re no longer a homeowner.
Find out more about the eligibility criteria from the National Housing Finance and Investment Corporation.

What Obligations Do You Have Under the First Home Owners Grant for Single Parents?

The first home owners grant is limited to residential property. You can’t apply for a loan to fund the purchase of a commercial or investment property. You’ll be expected to live in the residential property as your principal place of residence. Exceptions will only be made for members of the Defence Forces who may have to live elsewhere on duty. You won’t be allowed to change the purpose of the property. Most importantly, you’ll be obligated to pay your monthly home loan instalments for the duration of your loan, which shouldn’t be more than 30 years.

What Types of Properties Can You Buy Through the Singles’ First Home Owner Grant?

Under the first home owner grant, you can get:
  • An already built house, apartment, or townhouse
  • Land and house combo
  • Vacant land then get a stand-alone contract for home building
  • An off the plan townhouse or apartment
The grant will cap the price of the home you can buy or build at different limits depending on which part of the country you want to buy the property. The caps will also depend on whether you want to build or buy an existing home.

First Home Owner Grant for Singles Limits Per State

Territory / State Capital City Rest of the state
Buy existing home ($) Build new home($) Buy existing home($) Build new home($)
VIC 700,000 850,000 500,000 550,000
NSW 800,000 950,000 600,000 600,000
QLD 600,000 650,000 450,000 500,000
WA 500,000 550,000 400,000 400,000
SA 500,000 550,000 350,000 400,000
TAS 500,000 550,000 300,000 400,000
ACT 500,000 600,000
NT 500,000 550,000

How Do You Apply for the First Home Buyer Grants?

Each first home owner grant will be overseen by the National Housing Finance and Investment Corporation (NHFIC) through an approved bank or financial institution. There are 27 approved mortgage brokers and financial institutions for the 2021 financial year. To apply, find a lender or approved agent near you and submit your supporting documents. You won’t be expected to pay stamp duty or any extra costs for the grant, but as mentioned before, you’ll be obligated to pay off your home loan. Note: The NHFIC doesn’t directly accept home owner grant applications.

What If You Have More Money Saved up for the Deposit?

The first home owner grant for singles will guarantee the difference for a deposit of up to 20% of the property’s market value. They don’t actually pay up the balance. This means as far as your bank or financial institution is concerned, you’ll be getting a loan at a 2% deposit which translates to higher repayments.
Deposit % Loan extended($) Monthly payments($) First-year repayments($)
2 490,000 2,037 24,444
5 475,000 1,975 23,700
10 450,000 1,871 22,452
15 425,000 1,767 21,204

(Figures based on a $500,000 home purchase)

So, if you have more saved up, pay a higher deposit and let the government guarantee the difference. (If you pay a 6% deposit, the NHFIC guarantees the 14% difference). That way, you will pay less in instalments to pay back your loan. Remember that if you already have a 20% deposit saved up, you don’t qualify for the singles’ first home owner grant.

What Next After Your Loan Has Been Approved?

Once you’ve been approved for funding under the first home owner grant for singles, it's time to secure your property at market. Get in touch with your agent to find the best property within the budget allowed by the home owner grant. Alternatively, register on one of the top off-market listing sites like Listing Loop. Listing Loop can help you identify potential homes that fit within your first home owner grant. How? You’ll get access to the best properties before other buyers get wind of those listings allowing you to choose the best home for your budget. Plus, you can make your choice without the pressure of other buyers outbidding you. So, register on Listing Loop to find your perfect property match.


Photo by PCH.vector / CC BY

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