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FIRST HOME BUYER DUTY EXEMPTION

First Home Loan Deposit Scheme (FHLDS) Supporting First Home Buyers

Overview

The First Home Loan Deposit Scheme (FHLDS) is an Australian Government initiative to support eligible first home buyers to build or purchase a new home sooner. The Scheme is administered by the National Housing Finance and Investment Corporation (NHFIC).

Usually first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance. Under the Scheme, eligible first home buyers can purchase or build a new home with a deposit of as little as 5 per cent (lenders criteria apply). This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan.

In the 2020-21 Federal Budget, the Australian Government announced an additional 10,000 FHLDS places for the 2020-21 financial year, specifically for eligible first home buyers building or purchasing new homes. These additional places are known as the First Home Loan Deposit Scheme (New Homes) or FHLDS (New Homes).

There are currently 27 participating lenders across Australia offering places under the First Home Loan Deposit Scheme.

To find out more information about the First Home Loan Deposit Scheme and the FHLDS (New Homes), please select an option below: 

New Homes

In the 2020-21 Federal Budget, the Australian Government announced an additional 10,000 FHLDS places for the 2020-21 financial year, specifically for eligible first home buyers building or purchasing new homes. These additional places are known as the First Home Loan Deposit Scheme (New Homes) or FHLDS (New Homes).

Eligible first home buyers can use the FHLDS (New Homes) guarantee in conjunction with other government programs like the First Home Super Saver Scheme, HomeBuilder grant or state and territory First Home Owner Grants and stamp duty concessions.

The guarantee is not a cash payment or a deposit for your home loan.

Find out if you may be eligible

Search property price caps for your area

Apply with a participating lender

Eligible FHLDS (New Homes) properties

Under the FHLDS (New Homes), first home buyers can build or purchase a new home, including:

  • newly-constructed dwellings
  • off-the-plan dwellings
  • house and land packages
  • land and a separate contract to build a new home.

Specific dates and requirements apply for the different property types.

There are particular requirements and time frames which apply for each type of property. 

Important Time Frames

For all types of Eligible Properties, a contract of sale and/or an eligible building contract must be entered into prior to the expiry of the 90 day pre-approval period.

 Newly-constructed dwelling

Under FHLDS (New Homes), a newly-constructed dwelling refers to properties that completed construction on or after 1 January 2020 and:

  • has not previously been sold as residential premises or previously been the subject of a long-term lease (i.e. 50 years or more). However, properties which have been substantially renovated by the vendor or built by the vendor to replace a demolished premises (i.e. a knock down and rebuild) are eligible;
  • has not previously been rented or leased, or made available for rent or lease, as commercial residential or residential purposes;
  • has never been lived in; and
  • capable of being lived in from the date you settle.

First home buyers looking to purchase a newly-constructed dwelling must:

enter into a contract of sale by the end of their 90 day pre-approval period and

move into the property within six months of the settlement date of the home loan.

Note: First home buyers looking to purchase a property to do their own substantial renovations or knock down rebuilds are not eligible for FHLDS (New Homes).

Off-the-plan dwellings

An ‘off the plan’ purchase is where you enter into a contract of sale for the purchase of a property where, at that time of entering into the contract of sale:

  • the title to the property has not yet been issued, or
  • if title to the property has been issued, it cannot yet be legally occupied, for example the building of the property has not yet finished.

First home buyers looking to purchase off-the-plan must:

have a contract of sale dated on or after 7 October 2020

move into the property within six months of the occupancy certificate being issued

If you are not sure whether a particular property you plan to buy is an eligible ‘Off-the-Plan’ purchase under FHLDS (New Homes) or whether purchasing a property ‘Off-the-Plan’ suits your particular circumstances, then you should speak to a participating lender and/or seek your own independent financial and legal advice.

House and land packages

A house and land package is where you build a new home by entering into a contract of sale to purchase land from the same person (or persons within the same corporate group) as the person who you enter into a contract with to build your new home.

First home buyers looking to build a new home under a house and land package must (prior to the expiry of the pre-approval period) enter into:

  • a contract of sale for the land; and
  • an eligible building contract dated on or after 7 October 2020 to build a new home on that land.

First home buyers looking to build a new home under a house and land package must also:

start building a new home within 6 months of entering into an eligible building contract;

finish building within 24 months of starting; and

move into the property within six months of the occupancy certificate being issued.

Land and separate contract to build a home

A land and separate contract to build home is where you build a new home by entering into a contract of sale to acquire land from a person who is different to the person you enter into a contract with to build your New Home.

First home buyers looking to build a new home under a land and separate contract to build a home must (prior to the expiry of the pre-approval period) enter into:

  • a contract of sale to acquire the land under a contract of sale or, (in the Australian Capital Territory) a lease instrument; and
  • an eligible building contract dated on or after 7 October 2020 to build a new home on that land.

First home buyers looking to build a new home under a land and separate contract to build a home must also:

start building a new home within 6 months of entering into the eligible building contract;

finish building within 24 months of starting; and

move into the property within six months of the occupancy certificate being issued.

Building contracts

For a building contract to be eligible under the First Home Loan Deposit Scheme (New Homes), it must:

  • be with a licensed or registered builder
  • specify a fixed price for the construction of the dwelling.

Which home loans are eligible for the FHLDS (New Homes)?

Not all home loans are eligible for the First Home Loan Deposit Scheme (New Homes). The First Home Loan Deposit Scheme (New Homes) is restricted to ‘Eligible Loans’, which are home loans:

  • made by Participating Lenders to singles or couples who are eligible first home buyers, and
  • that are for the purchase of an Eligible Property that is to be occupied by you as the owner.

There are additional requirements that apply in relation to these home loans that rely upon the terms that agreed with a Participating Lender. These include that the home loan will need to:

  • be for a term of 30 years or less
  • have regular repayments of principal (with limited exceptions for interest only loans, which mainly relate to building loans)
  • include a mortgage over the purchased property
  • be in Australian dollars
  • have appropriate lending limits to recognise the Scheme’s deposit requirements
  • comply with relevant laws and the lender’s own policies.

The Participating Lender will need to ensure that the terms of any home loan arrangement under FHLDS (New Home) comply with these matters.

For more information, contact a participating lender for further detail.

Not for you?

If you are unable to meet the timeframes or requirements for eligible properties under the FHLDS (New Homes), you may be able to apply to build or purchase a new home under the existing First Home Loan Deposit Scheme.  

Existing Homes

The First Home Loan Deposit Scheme is an Australian Government initiative to support eligible first home buyers purchase their first home sooner.

Usually first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance. Under the Scheme, eligible first home buyers can purchase a modest home with a deposit with as little as 5 per cent (lenders criteria also apply). This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan.

Eligible first home buyers can use the First Home Loan Deposit Scheme (FHLDS or the Scheme) in conjunction with other government programs like the First Home Super Saver Scheme, HomeBuilder grant or state and territory First Home Owner Grants and stamp duty concessions.

The guarantee is not a cash payment or a deposit for your home loan.

Find out if you may be eligible

Search property price caps for your area

Apply with a participating lender

Eligible FHLDS properties

For a property to be eligible for the Scheme it must:

  • be a ‘residential property’ – this term has a particular meaning under the Scheme, and you should ask your lender if there is any doubt
  • have a purchase price (and value) under the price cap for its location
  • be purchased by an eligible first home buyer under the Scheme
  • list you as the sole registered owner/s of the property at the settlement date for your home loan
  • be a property which is (1) an established dwelling, or (2) a new-build dwelling that is purchased under a house and land package, a land and separate contract to build a home or an ‘off-the-plan’ arrangement that is financed under an Eligible Loan from a participating lender.

Important timeframes

The relevant dates and requirements for the different property types are set out in the table below.

Contract and settlement dates

To be eligible for the Scheme, the contract of sale and (if applicable) eligible building contract may have particular dates when they can be signed by you (all as described further below).

There are no exceptions from these required dates.

Purchase of existing dwelling

If you are purchasing an existing dwelling:

  • you must move into the property within 6 months of the settlement of your home loan, and
  • the property must be purchased under a contract of sale dated on or after 1 January 2020.

This category does not include ‘off-the-plan’ purchases, which are
described below.

House and land package

A house and land package is where you build a home by entering into a contract of sale to purchase land from the same person (or persons within the same corporate group) as the person who you enter into a contract with to build your home.

For a house and land package, prior to the settlement date for your home loan you will need to have entered into:

  • a contract of sale for the land; and
  • an eligible building contract to build your home on that land.

These can either be in the same contract or two separate contracts. Your home loan will also include a requirement for you to:

  • start building your home within 12 months; and
  • finish building your home within 24 months

of the settlement date for your home loan.

You will also need to move into the property within 6 months of an occupancy certificate being issued.

Land and separate contract to build a home

A land and separate contract to build home is where you build a home by entering into a contract of sale to acquire land from a person who is different to the person you enter into a contract with to build your home.

For a land and separate contract to build home, you will need to have entered into a contract of sale to acquire the land under a contract of sale or, (in the Australian Capital Territory) a lease instrument. You will also need to move into the property within 6 months of an occupancy certificate being issued.

You may obtain a home loan to buy the land and finance the building of your home. If you do so, then your Participating Lender will require you to enter into an eligible building contract before the settlement of your home loan and:

  • start building your home within 12 months; and
  • finish building your home within 24 months,

of the settlement date for your home loan.

You may be able to obtain a home loan to buy the land before obtaining a loan to finance the building of your home. If you do so, then your Participating Lender will require you to:

  • enter into an eligible building contract within 6 months;
  • start building your home within 12 months; and
  • finish building your home within 24 months,

of the settlement date of your home loan to buy the land.

If you choose to buy the land before obtaining a loan to finance the building of your home, you will need to ensure that at the time your loan agreement is entered into to finance the building of your home, the purchase price for your land and the cost to build your home does not exceed the price cap that is applicable to your
property. If they do exceed the price cap, then your home loan will not be eligible for the Scheme and your Participating Lender may require you to obtain lenders mortgage insurance or provide a higher deposit to continue with your home loan.

‘Off-the-plan’ purchases

If you are making an ‘off-the-plan’ purchase:

  • you must have signed the contract of sale before the settlement date for your home loan, and
  • the settlement date for your home loan must occur within 90 days that your home loan becomes guaranteed under the Scheme.

You will also need to move into the property within 6 months of the settlement date for your home loan.

What is an eligible building contract?

For a building contract to be eligible under the First Home Loan Deposit Scheme, it must:

  • be with a licensed or registered builder
  • specify a fixed price for the construction of the dwelling.

‘Owner builder’ contracts are not eligible building contracts for the Scheme.

Which home loans are eligible for the FHLDS?

Not all home loans are able to take the benefit of the Scheme.

The Scheme is restricted to ‘Eligible Loans’, which are home loans:

  • made by a Participating Lender to (1) a single eligible first home buyer, or (2) a couple who are both eligible home buyers, and
  • that are for the purchase of an Eligible Property that is to be occupied by you as the owner.

In addition to these overarching eligibility requirements, the loans must:

  • be secured by a registered first ranking mortgage over the eligible property
  • have no other registered owners at the time of settlement, other than the eligible borrower/s
  • have 100% of the loan drawdown proceeds used for the purchase (or towards the purchase and improvement) or construction of the eligible property
  • have a loan amount commitment not less than 80% and not more than 95% of the relevant value of the property
  • have a loan term of 30 years or less
  • require regular principal and interest loan repayments.

Exception to this will be granted during the construction of a new dwelling, whereby lenders will be able to allow borrowers to make interest only repayments for the period in which the dwelling is being constructed until it can be occupied by the borrower.

  • allow for no changes to loan terms, such as increased limit.

The loan may comprise more than one tranche, for example fixed and variable loan tranches.

 

Purchasing Vacant Land

If you are intending to buy vacant land and construct a dwelling on that land, you will need to enter into a building contract to build a home on the land within six months of the loan settlement date.

If you already own vacant land and intend to take a new home loan to construct a dwelling on that land, your home loan is not eligible for the Scheme. This is because you do not satisfy the prior property ownership test.

You will need to contact your lender to clarify whether your home loan is eligible under the Scheme.

 

Am I Eligible?

Use the Eligibility Tool below to find out whether you meet the First Home Loan Deposit Scheme eligibility criteria as a first home borrower.

Please note that this tool is provided as a guide only and does not mean that you will receive either a guarantee or a loan from a participating lender.

Check your eligibility

To begin the eligibility tool, choose an option below:

I intend to purchase a residential property on my own.

 I intend to purchase a residential property with someone else.

Borrower Eligibility

The First Home Loan Deposit Scheme is open to singles or couples.

Singles

If you are looking to purchase your first home as the only person named as a borrower in your home loan, then you would apply under the Scheme as a single.

Couples

If you are looking to purchase your first home with your spouse or de facto partner, where you are both named as borrowers in your home loan, then you would both apply under the Scheme as a couple.

These are the only two types of applications that are eligible under the Scheme.

Home loan arrangements made with family or friends, with more than two borrowers, or any instance where the other borrower is not your spouse or de facto partner, are ineligible for the First Home Loan Deposit Scheme.

Your eligibility checks

There are several criteria used to determine eligibility as a first home buyer under the Scheme. You should consider whether your personal circumstances satisfy all of the following checks, including:

an income test

a prior property ownership test

a minimum age test

a deposit requirement, and

an owner-occupier requirement.

You need to satisfy all these checks to qualify for the Scheme. If you don’t meet the requirements for one or more of these checks, or have questions about any of these matters, you should ask your lender and/or seek appropriate advice.

Income test

The Scheme includes an income test for:

  • singles – your taxable income for the previous financial year must not be more than $125,000.
  • couples – your combined taxable income for the previous financial year must not be more than $200,000.

The income test is assessed by your lender.

For Scheme reservations made up to 30 June 2020, the relevant Notice of Assessment (NOA) from the Australian Taxation Office is for the 2018-19 income year. However, if you hold that reservation for too long (e.g. more than 90 days), your relevant NOA may end up being the 2019-20 income year.

For Scheme reservations made from 1 July 2020 to 30 June 2021, the relevant NOA is the 2019-20 income year.

Prior ownership test

The Scheme is in place to assist genuine first home buyers.

The prior ownership test requires you to not have ever owned:

  • a freehold interest in real property in Australia
  • an interest in a lease of land in Australia with a term of 50 years (or more), or
  • a company title interest in land in Australia.

These tests apply for property interests in all states and territories of Australia, regardless of whether the property was a commercial property, an investment or owner-occupied, and whether it was ever lived in.

They also apply if any of the interests listed above have been held by you on your own or together with someone else – for example, where you held an interest in property with a former spouse or de facto partner.

Note that if either of you – whether individually or with someone else – have held any of the interests listed above, as a couple you are not eligible first home buyers.

For your home loan to be covered by the Scheme, you will need to make a statutory declaration that confirms you have not held any interests of this kind. This declaration is made under the First Home Buyer Declaration provided to you by your participating lender.

If you are unsure of whether you have held any of the interests listed above you should ask a professional adviser, as you will need to be sure that you are not giving a false declaration.

Citizenship test

The Scheme is only open to current Australian citizens.

The citizenship test for you being an ‘eligible first home buyer’ for the Scheme is that you will need to be an Australian citizen at the time you enter into a home loan with your participating lender.

If you are applying under the Scheme as part of a couple, you will both need to be Australian citizens.

The Scheme is not open for permanent residents who are not Australian citizens.

Minimum age

The Scheme is only open to persons that are 18 years of age or over.

The minimum age test requires you to be 18 years of age or over at the time you enter into a home loan with your participating lender.

Deposit requirement

There is a minimum deposit requirement for the Scheme.

The Scheme is to assist singles and couples (together) who have at least five per cent (5%) of the value of an eligible property saved as a deposit. The 5% must be made up of genuine savings. If you have 20% or more saved, then your home loan will not be covered by the Scheme.

Your Participating Lender will be able to tell you if you satisfy this requirement. You should also confirm with your Participating Lender whether any cash grants under other Australian Government, State or Territory schemes or programs you may receive can be considered as part of
genuine savings by that Participating Lender.

Owner occupier requirement

The Scheme is provided to assist Australians to purchase their first home.

Investment properties are not supported by the Scheme.

To meet the owner-occupier requirement, you will need to:

  • move into the property within six months from the date of settlement or, if later, the date an occupancy certificate is issued, and
  • continue to live in that property for so long as your home loan has a guarantee under the Scheme.

If you don’t live in your property – including where you move out of the property at a later time – your home loan will cease to be guaranteed by the Scheme*. In these circumstances there may be terms and conditions of your home loan that require you to take certain actions – including that you may be need to pay fees and charges and/or take out insurance that would not have otherwise applied if your home loan were participating under the Scheme.

Your participating lender will be able to explain these terms and conditions to you.

* Members of the Australian Defence Force (ADF) are still required to be owner-occupiers under FHLDS however if they are unable to meet the owner-occupier requirement because of their duties, they can still be eligible if, at the time of entering into their loan agreement, they intend to live in the property.

Property Price Caps

Maximum purchase prices (property price caps) are applicable for eligible properties purchased under the First Home Loan Deposit Scheme in capital cities, large regional centres and regional areas.

Note: Higher property price caps apply for eligible properties purchased under the FHLDS (New Homes). If you are unsure of the relevant price cap for the property you are looking to purchase, please contact a participating lender to confirm.

Search property price cap by suburb

Please note that this tool is provided as a guide only and does not mean that you will receive either a guarantee or a loan from a participating lender. Please confirm the relevant property price cap for your circumstances with a participating lender.

To find the property price cap for a suburb, start typing the postcode or suburb of the property in the box below. Select the pre-filled suburb, state and postcode, then click Submit.

Submit

If the suburb or postcode you wish to search does not appear, or if you have a query regarding the results, please contact us at FHLDS@nhfic.gov.au

This postcode search tool can help you determine whether the property you intend to purchase could be eligible for the First Home Loan Deposit Scheme and the FHLDS (New Homes). It is your responsibility to find out whether or not a particular property within a specific suburb is eligible for the First Home Loan Deposit Scheme. If in doubt, it is your responsibility to get the advice you need from a participating lender or otherwise to be sure of your position. The NHFIC, its employees and agents will not be responsible for any claims for direct or indirect loss allegedly caused by or arising from the use of this tool.

Overview of property price caps across Australia

The below table shows the maximum purchase price under the Scheme and the FHLDS (New Homes) for Australian capital cities, large regional centres and regional areas:

Region IDRegionFHLDS
Price Cap ($AUD)
FHLDS (New Homes) only
Price Cap ($AUD)
1NSW – capital city$700,000$950,000
2NSW – regional centre (Newcastle and Lake Macquarie)$700,000$950,000
3NSW – regional centre (Illawarra)$700,000$950,000
4NSW – other$450,000$600,000
5VIC – capital city$600,000$850,000
6VIC – regional centre (Geelong)$600,000$850,000
7VIC – other$375,000$550,000
8QLD – capital city$475,000$650,000
9QLD – regional centre (Gold Coast)$475,000$650,000
10QLD – regional centre (Sunshine Coast)$475,000$650,000
11QLD – other$400,000$500,000
12WA – capital city$400,000$550,000
13WA – other$300,000$400,000
14SA – capital city$400,000$550,000
15SA – other$250,000$400,000
16TAS – capital city$400,000$550,000
17TAS – other$300,000$400,000
18ACT$500,000$600,000
19Northern Territory$375,000$550,000
20Jervis Bay Territory & Norfolk Island$450,000$600,000
21Christmas Island & Cocos (Keeling) Island$300,000$400,000

 

The capital city price caps apply to large regional centres with a population over 250,000 (the Gold Coast, Newcastle and Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong), recognising that dwellings in large regional centres tend to be significantly more expensive than other regional areas.

How to apply

All applications for the First Home Loan Deposit Scheme need to be made directly with one of the Scheme’s participating lenders (or their authorised representatives, i.e. a mortgage broker).

NHFIC does not accept applications directly and we cannot provide personal financial advice.

First home buyers (and those advising a first home buyer) are encouraged to consult with a participating lender and seek their own independent financial and legal advice on how to structure their loan arrangements in a way that suits their own personal circumstances.

Participating Lenders

Following a competitive procurement process in 2019, NHFIC appointed 27 lenders to the panel of residential mortgage lenders able to offer guarantees under the Scheme.

Both National Australia Bank and Commonwealth Bank of Australia have offered Scheme-backed loans from 1 January 2020. The 25 non-major lenders have offered guaranteed loans from 1 February 2020.

All participating lenders are supporting the Scheme by not charging eligible customers higher interest rates than equivalent customers outside the Scheme.

 

MAJOR BANK LENDERS

 

NON-MAJOR LENDERS

 

Frequently Asked Questions (FAQs)

This page contains general information about the First Home Loan Deposit Scheme. For specific information about whether or not your particular circumstances make you eligible for the Scheme, please contact your participating lender.

FAQs about the First Home Loan Deposit Scheme (New Homes)

What is the Scheme and how does it work?

1.1 WHAT IS THE FIRST HOME LOAN DEPOSIT SCHEME?

The Australian Government has introduced the First Home Loan Deposit Scheme (the Scheme) to assist eligible first home buyers to purchase a home sooner.

It does this by providing a guarantee to participating lenders that will allow eligible first home buyers to purchase a home with a deposit of as little as 5 per cent without needing to pay for lenders mortgage insurance.

The Australian Government operates the Scheme through the National Housing Finance and Investment Corporation (NHFIC).

1.2 WHAT IS LENDERS MORTGAGE INSURANCE?

Lenders mortgage insurance (LMI) is a one-off payment that a borrower needs to pay to their lending institution (the bank) when they are borrowing more than 80 per cent of a property’s value – or in other words, when the borrower has less than 20 per cent to put down as a home deposit. The LMI payment doesn’t contribute towards the loan or benefit the borrower – it is only to protect the lender.

1.3 WHAT IS THE ‘GUARANTEE’?

Through the Scheme, the Australian Government provides a guarantee on an eligible loan provided by a participating lender to an eligible first home buyer.

The guaranteed amount is the difference between the first home buyer’s deposit (of at least 5 per cent) and 20 per cent of the value of the eligible property. It is similar to parental or family guarantees which already exist, but in this case the Australian Government acts as the guarantor.

By providing this guarantee, an eligible first home borrower no longer has to pay lenders’ mortgage insurance.

1.4 DO I GET A CASH PAYMENT?

No, the guarantee is not a cash payment or a deposit for your home loan.

1.5 DO I HAVE TO PAY BACK THE AUSTRALIAN GOVERNMENT?

While there are no costs or repayments associated with the Scheme guarantee, you are responsible for meeting all costs and repayments for the home loan associated with the guarantee. You also need to observe the requirements of the Scheme for as long as you’re covered by the guarantee.

1.6 HOW MANY PLACES ARE AVAILABLE?

There are 10,000 guarantees released to the participating lender panel each financial year (1 July to 30 June).

In the 2020-21 Federal Budget, the Australian Government announced an additional 10,000 FHLDS places for the 2020-21 financial year however these are specifically for eligible first home buyers building or purchasing new homes and the places are only available until 30 June 2021.

1.7 WHAT IF I MISS OUT? CAN I REAPPLY?

If you are unable to get a scheme place with your preferred lender, you are encouraged to contact any of the other lenders on the participating lender panel that may have scheme places available. Your eligibility for the Scheme depends on your personal financial circumstances, property eligibility and the availability of guarantees.

Provided you satisfy the Scheme eligibility criteria and lending requirements of a participating lender, you can reapply for the Scheme if your initial application is unsuccessful.

1.8 WILL THE GOVERNMENT MAKE MORE SCHEME PLACES AVAILABLE?

Generally only 10,000 places are available each financial year, however the Australian Government announced an additional 10,000 places as a time limited expansion of the First Home Loan Deposit Scheme (FHLDS) for the 2020-21 financial year to support economic stimulus measures and to create jobs in the residential construction sector.

Any decision to increase the number of guarantees available in any given financial year is determined by the Australian Government. NHFIC does not set the number of guarantees.

1.9 HOW LONG DOES THE FIRST HOME LOAN DEPOSIT SCHEME GUARANTEE REMAIN IN PLACE?

The guarantee stays in place until the loan is refinanced, you sell your home, move out or until your loan principal balance reduces to below 80 per cent of the value of your property at purchase.

1.10 WHAT HAPPENS IF I MOVE OUT OR SELL THE PROPERTY?

If you move away for an extended period and your home becomes an investment property (i.e. you rent it out to tenants), then your home loan may no longer be guaranteed under the Scheme. If your move is a temporary one and you do not rent out your house (i.e. it remains your home) then your home loan may continue to be guaranteed under the scheme.

Before moving out (or if you believe you may need to move out), you should discuss this with your lender so that you are fully aware of your responsibilities under the Scheme and the policies of your lender. If your home loan is no longer guaranteed under the Scheme, your lender may require you to take certain actions (including paying fees and/or charges or taking out lenders mortgage insurance).

Note that members of the Australian Defence Force (ADF) are still required to be owner-occupiers under the FHLDS. However if the ADF borrower(s) is unable to meet the owner-occupier requirement because of their duties, the borrower(s) may still be eligible if, at the time of entering into their loan agreement, they intend to live in the property. NB: the exemption only applies to ADF members (but not a reserve member) who are unable to satisfy the owner-occupier requirement because of their duties on and from 6 October 2020.

Section 2 – Am I Eligible?

2.1 AM I ELIGIBLE FOR THE FIRST HOME LOAN DEPOSIT SCHEME?

There are a range of eligibility criteria for the Scheme that cover:

  • Borrower eligibility (including income, minimum age, citizenship and prior ownership tests)
  • Loan eligibility (deposit and owner-occupier requirements)
  • Property eligibility which differs for FHLDS and FHLDS (New Homes)

Check the eligibility page on this website, or use our online interactive eligibility tool to better understand if you meet the Scheme criteria.

You can also search by suburb or postcode to find the relevant property price threshold for the area in which you are looking to purchase or build a property.

Participating lenders can also assist you in determining whether you may be eligible for the Scheme.

2.2 CAN I APPLY WITH SOMEONE ELSE?

You can either apply for a Scheme place as an individual (single application) or as part of a borrower couple (couple application).

The Scheme identifies a couple application as two eligible borrowers who are married or in a de facto relationship with each other.

This means home loan arrangements made with family or friends, with more than two borrowers, or any instance where the other borrower is not your spouse or de facto partner, are ineligible for the First Home Loan Deposit Scheme.

2.3 ARE AUSTRALIAN PERMANENT RESIDENTS ELIGIBLE?

The Scheme is only open to current Australian citizens.

The Scheme is not open for permanent residents who are not Australian citizens.

If you are applying under the Scheme as part of a couple, then you will both need to be Australian citizens and both be first home buyers.

2.4 HOW DO I KNOW IF MY PARTNER IS MY DE FACTO PARTNER?

You are a de facto if you fall within the meaning of de facto under the law in the State or Territory of Australia where you live. In some States and Territories, you may even register your de facto relationship.

If your de facto relationship has not been registered, your lender may require you to provide certain documents or information to evidence that you are in a de facto relationship. If you have any queries, you should seek independent legal advice and consult with your participating lender.

2.5 WILL APPLYING AS A SINGLE AND AS PART OF A COUPLE INCREASE MY CHANCES OF OBTAINING A PLACE UNDER THE SCHEME?

No. A person can only have one Scheme place under either a single or couple application.

Before asking your lender to make a reservation application for you, it is important that you have decided how you want to structure your home loan (as either a single or as part of a couple) because this may have an impact on your ability to secure a Scheme place.

For example, if a successful reservation is made for you as a single applicant, then you cannot seek to have another reservation made for you as part of a couple (and vice versa).

If a successful reservation is made for you as a single applicant, your lender would need to withdraw your single application if you later wished to apply as part of a couple. In this case, a new reservation for a couple application would need to be made and would be dependent on whether a Scheme place was available at the time.

2.6 HOW MUCH DEPOSIT DO I NEED?

Check with your participating lender to find out how much deposit you need to save. The Scheme allows eligible first home buyers to purchase or build a home with a deposit of as little as 5 per cent without needing to pay for lenders mortgage insurance, however participating lenders may apply their own additional criteria for Scheme-backed loans. This can include a higher percentage deposit based on your financial circumstances.

2.7 WHAT IF I OWN OR HAVE AN INTEREST IN PROPERTY IN AUSTRALIA?

It is important that the Scheme assists genuine first home buyers. Read more information about the prior ownership test.

If you are applying under the Scheme:

  • as a single’, then only you, individually, will need to satisfy the prior property ownership test, or
  • as part of a couple’, then you will both need to satisfy the prior property ownership test.

As part of the Scheme application process, you will need to make a statutory declaration that confirms you have not held a freehold interest in real property in Australia; an interest in a lease of land in Australia with a term of 50 years (or more), or a company title interest in land in Australia. This declaration is made under the First Home Buyer Declaration provided to you by your participating lender.

If you are unsure of whether you have held any of the interests listed above you should ask a professional adviser, as there are legal consequences for providing a false statutory declaration.

Section 3 – How do I apply?

3.1 HOW DO I APPLY?

You can apply for the Scheme through a participating lender. A participating lender is a bank or other lending institution that has been appointed to the participating lender panel to offer guaranteed loans under the Scheme. The full list of participating lenders is available on our website.

NHFIC doesn’t accept applications directly from first home buyers.

3.2 IS THERE A WAITING LIST FOR SCHEME PLACES?

NHFIC doesn’t accept applications or maintain a waiting list for places under the Scheme. You can apply for the Scheme through a participating lender.

The full list of participating lenders is available on our website.

3.3 WHAT IS A SCHEME RESERVATION?

When you apply for a Scheme-backed loan with a participating lender, your lender will assess your eligibility and then request a Scheme place for you with NHFIC. NHFIC will reserve a Scheme place for you for 14 days, during which time you will need to organise a finance pre-approval with your lender.

3.4 CAN I APPLY WITH MORE THAN ONE LENDER?

Yes, you can apply with more than one participating lender; although you may have multiple applications, you will only be offered one place under the Scheme. Before making a reservation, you should carefully consider the eligibility criteria, particularly whether to apply as a single or as part of a couple.

3.5 WHAT IF I HAVE A RESERVED SCHEME PLACE BUT DECIDE TO CHANGE LENDERS?

If a participating lender makes a reservation on your behalf and you then decide to apply for a Scheme-backed loan with another lender, NHFIC will be able to see that you have an existing Scheme Place and may be able to link that reservation to your existing Scheme Place. Your application may be linked where your original reservation remains active and the other participating lender has not exceeded the maximum number of reservations it is permitted to have under the Scheme.

If you decide to apply to more than one participating lender, it is important that you:

  • understand the time periods within which you must meet certain requirements will commence from the date of your first Scheme Place reservation; and
  • use the same reservation details when speaking with each participating lender. If you do not use the same details, a participating lender may not be able to (or there could be delays to) make a linked reservation on your behalf, which may impact on your ability to obtain a Scheme-backed Loan from that participating lender.

Note: If you are applying for a FHLDS (New Homes) Scheme place, please see the relevant FAQ ‘Can an existing FHLDS place be transferred to the FHLDS (New Homes)?’

3.6 CAN I USE A MORTGAGE BROKER?

Yes. Eligible borrowers may apply for a guaranteed loan through a registered mortgage broker, provided that the broker has a relationship with a participating lender.

3.7 THE SCHEME REQUIRES ME TO HAVE A MINIMUM DEPOSIT OF 5 PER CENT MADE UP OF GENUINE SAVINGS. WHAT IS CONSIDERED GENUINE SAVINGS?

Broadly, genuine savings refers to amounts either saved or held over a period of time which your lender considers to be genuine savings. Speak with your lender to find out whether the deposit you have is made up of genuine savings for the purposes of their lending criteria and the Scheme.

You should also confirm with your participating lender whether any cash grants under other Australian Government, state or territory schemes or programs you may receive can be considered as part of genuine savings by that participating lender.

3.8 WHAT DO I NEED TO PROVIDE MY LENDER TO APPLY?

To reserve a place for you under the Scheme, your lender will need certain information from you including:

  • Your full name (legal name as it will appear on the title of any property you purchase)
  • Your date of birth
  • Your Notice of Assessment (NOA) from the Australian Taxation Office for the previous financial year. For Scheme reservations made up to 30 June 2020, the relevant NOA is the 2018-19 income year. However, if you hold that reservation for too long (e.g. more than 90 days), your relevant NOA may end up being the 2019-20 income year. For Scheme reservations made from 1 July 2020 to 30 June 2021, the relevant NOA is the 2019-20 income year. In any event, you should file your tax return as soon as you are able to enable to you to verify your taxable income to a participating lender.

It is recommended that you collect and have this information available when you first contact your lender. Your lender may also request other documents or information from you depending on your circumstances and their processes.

3.9 WHAT IF MY PERSONAL CIRCUMSTANCES MEAN THAT I DON’T HAVE AN NOA?

If you’re applying for the Scheme as a couple and one of you earns less than the tax-free threshold and therefore not required to lodge a tax return, then you will need to provide your participating lender with evidence of your income so they can ensure that as a couple you earn less than the taxable income threshold of $200,000. You will also need to declare via the First Home Buyer Declaration form provided to you by your lender that you are not required to submit a tax return as you earn less than the tax-free threshold of $18,200.

In any other circumstances where you don’t have an NOA (for example, you have been working overseas), please contact your participating lender for advice on other documentation they may accept as evidence of your income.

3.10 WHAT HAPPENS IF MY SCHEME PLACE RESERVATION EXPIRES?

If your Scheme place reservation expires you will be required to reapply for another Scheme place with a participating lender. You will only be able to reapply if there is a Scheme place available at the time your lender submits an application on your behalf.

3.11 WHEN DO I FIND OUT IF I HAVE A GUARANTEE?

Your participating lender will tell you if you have been successful in reserving a Scheme place for a guaranteed loan. Processing times vary between different participating lenders, so you will need to check with your lender in the first instance. Generally, however, the time it takes to assess your eligibility for a guarantee aligns with the participating lender’s timeframe for assessing your loan application.

Your home loan cannot be guaranteed under the Scheme unless you are also approved by your lender for an eligible loan on an eligible property or build.

NHFIC is unable to provide advice about the status of your guarantee or associated loan application.

3.12 HOW LONG DO I HAVE TO FIND A PROPERTY?

Note: If you are applying to purchase or build a new home in 2020-21 under the FHLDS (New Homes), stricter timeframes apply. Please see the relevant FAQs for eligible properties purchased under the FHLDS (New Homes).

For the First Home Loan Deposit Scheme, you have 90 days from the date you have been first pre-approved under the Scheme to find a property and enter a contract of sale. Your lender will be able to provide you with details of when you have been first pre-approved under the Scheme so that you know how much time you have to find a property and enter into a contract of sale.

Generally, if you are not able to find a property prior to the end of the 90 days, then your Scheme place reservation will expire. However, due to the current situation with COVID-19, if you are unable to find a property and enter into a contract of sale prior to the expiry of your pre-approval under the Scheme, you may be eligible for an extension (unless you are purchasing or building a new home in 2020-21 under the FHLDS (New Homes). Contact your participating lender to discuss whether you qualify for an extension.

3.13 WHAT HAPPENS WHEN I FIND A PROPERTY?

Upon entering into a contract of sale, it is important that you contact your lender immediately to finalise your financing arrangements. Your lender will notify NHFIC that a contract of sale has been signed, in which case you will then have an additional 30 days to complete all the necessary paperwork to obtain an unconditional finance approval from your lender.

3.14 WHEN DO I NEED TO SETTLE ON MY PROPERTY

Note: If you are applying to purchase or build a new home in 2020-21 under the FHLDS (New Homes), stricter timeframes apply. Please see the relevant FAQs for eligible properties purchased under the FHLDS (New Homes) or contact a participating lender.

Settlement must occur within 100 days of your guarantee certificate being issued. Check with your participating lender if you have any questions or concerns about the timeframes and requirements for Scheme place reservations. 

Section 4 – Is My Lender Approved For The Scheme?

4.1 MY BANK ISN’T ON THE LIST OF PARTICIPATING LENDERS, CAN I STILL APPLY WITH THEM?

No, only participating lenders can offer guaranteed loans under the Scheme.

4.2 WILL MORE BANKS BE ABLE TO OFFER GUARANTEES IN THE FUTURE?

NHFIC may expand the panel of participating lenders in the future.

4.3 DO ALL PARTICIPATING LENDERS HAVE THE SAME ELIGIBILITY CRITERIA FOR THE SCHEME?

Yes. However, participating lenders may apply their own additional criteria for loans offered under the Scheme, such as restrictions on certain properties, suburbs, purchasing property with existing tenancy, or a higher percentage deposit based on your circumstances, etc.

In addition, not all participating lenders will offer the same home loan products. For example, some participating lenders may allow you to buy land before entering into a contract with a builder while others may require you to enter into a building contract before you settle on your land.

Check with your participating lender to see what additional criteria they may have.

4.4 WILL I BE CHARGED A HIGHER INTEREST RATE UNDER THE SCHEME?

All participating lenders have committed not to charge eligible first home buyers higher interest rates than equivalent borrowers outside of the Scheme.

4.5 CAN I KEEP THE GUARANTEE IF I SWITCH BANKS?

Note: If you are applying to purchase or build a new home in 2020-21 under the FHLDS (New Homes), please contact your participating lender.

For the First Home Loan Deposit Scheme, you may be able to move your guaranteed loan between participating lenders provided that in doing so there is no increase to the loan amount or the term of the loan and that it remains an eligible loan as defined in the Scheme rules. Check with your preferred participating lender for more information.

4.6 WHAT IF I HAVE A COMPLAINT ABOUT MY LENDER?

General complaints about your lender should be made to your lender and/ or any relevant complaints authority.

 

Section 5 – Which Home Loans and Properties are Eligible for the Scheme?

5.1 WHAT IS AN ELIGIBLE LOAN?

For a home loan to be eligible under the Scheme, it must be made by a Participating Lender to either a single eligible first home buyer, or to a couple who are both eligible home buyers, for the purchase of an Eligible Property that is to be occupied by the owner.

Learn more about eligible loans for the First Home Loan Deposit Scheme (New Loans) and the First Home Loan Deposit Scheme on our website.

5.2 CAN I APPLY FOR THE FIRST HOME LOAN DEPOSIT SCHEME TO PURCHASE A PROPERTY OUTSIDE OF AUSTRALIA?

No, the Scheme is only available for the purchase or build of properties in Australia.

5.3 I HAVE ALREADY SIGNED A CONTRACT TO PURCHASE A PROPERTY, CAN I STILL APPLY?

This depends on the type of property you are purchasing.

If you are purchasing or building a new property under the FHLDS (New Homes), read more about the important timeframes on the New Homes page.  

If you are purchasing an existing property (or purchasing or building a new property under the FHLDS, read more about the important timeframes on the Existing Homes page. 

5.4 CAN I USE THE GUARANTEE TO MAKE AN OFF-THE-PLAN PURCHASE?

Yes, the Scheme is available for a range of different property purchases, provided both the borrower and the property intended for purchase satisfy the Scheme eligibility criteria and are approved for a home loan by a participating lender.

5.5 CAN I USE THE GUARANTEE TO BUILD MY OWN HOME OR PURCHASE A HOUSE AND LAND PACKAGE?

Yes, the Scheme is available for a range of different property purchases, provided both the borrower and the property intended for purchase satisfy the Scheme eligibility criteria and are approved for a home loan by a participating lender.

You can use a guarantee to build your home under:

  • a house and land package; or
  • a land and separate contract to build a new home

Where you are building under the FHLDS (New Homes), read more about the important timeframes on the New Homes page.

Where you are making building under the FHLDS, read more about the important timeframes on the Existing Homes page.

5.6 CAN I BUY THE LAND FIRST AND THEN BUILD LATER ON?

You may be able to obtain a home loan to first purchase land and then to build your first home on that land. This is known as purchasing Land and separate contract to build a home.

Where you are purchasing Land and separate contract to build a home under the FHLDS (New Homes), read more about the important timeframes on the New Homes page.

Where you are making purchasing Land and separate contract to build a home under the FHLDS, read more about the important timeframes on the Existing Homes page.

5.7 WHAT HAPPENS IF I CANNOT MEET THE TIMEFRAMES AND REQUIREMENTS FOR SEPARATE LAND AND BUILD CONTRACTS?

If you are purchasing under the FHLDS (New Homes), shorter contract, start and finish build times apply to assist with stimulating the residential construction sector.

You generally must enter into a contract of sale and, if you are building, an eligible building contract, within 90 days being advised you have been pre-approved for a Scheme place. No extensions from this requirement can be given. If you are unable to enter into these contracts by the end of your Scheme pre-approval period, your reservation will expire and your ability to be able to secure another Scheme place will depend on whether one is available at the time your Participating Lender is able to make a new reservation for you.

If you are purchasing under the FHLDS and not the FHLDS (New Homes), and generally, if the delay is not due to your own action, or inaction, you may qualify for an extension to the requirements under the Scheme – for example, where the builder has gone insolvent or there is general decline in the construction sector which has made it difficult for you to meet the requirements.

If you do not qualify for an extension, then your Participating Lender may no longer be able to continue with your Scheme-Backed Loan and may require you to obtain lenders mortgage insurance in order to continue with your home loan.

If you think you may not be able to meet the timeframes and requirements, then you should discuss this with your participating lender as soon as possible. Your participating lender will be able to assist in determining whether you would be eligible for an extension.

5.8 CAN I BUILD MY OWN HOME?

No, ‘owner builder’ contracts are not eligible building contracts for the Scheme. Read more information on what is classified as an eligible building contract.

5.9 ARE THE PROPERTY PRICE CAPS FLEXIBLE?

The property price caps for the Scheme are set by the Australian Government. They have been set to ensure the Scheme is available for the purchase of a modest home, or the purchase of land and construction of a modest home, consistent with the Scheme’s objectives.

5.10 DOES THE SCHEME RESTRICT ME FROM PURCHASING IN PARTICULAR AREAS?

No. Under the Scheme, you can purchase a residential property anywhere in Australia, as long as the property is within the price cap for that suburb.

However, each participating lender will have its own lending criteria and this may include restrictions on certain areas on where it is prepared to lend.

If you are not sure if the property is an eligible property under the Scheme or if it satisfies your participating lender’s lending criteria, then you should discuss this with your participating lender.

Section 6 – Scenario Questions

6.1 WHAT HAPPENS IF MY SCHEME PLACE RESERVATION EXPIRES?

If your Scheme place reservation expires you will be required to reapply for another Scheme place with a participating lender. You will only be able to reapply if there is a Scheme place available at the time your lender submits an application on your behalf.

6.2 CAN I USE THE FIRST HOME LOAN DEPOSIT SCHEME TOGETHER WITH OTHER GOVERNMENT INCENTIVES FOR FIRST HOME BUYERS?

Yes, you can apply for a guaranteed loan under the Scheme as well as other Commonwealth, State and Territory Government programs including the First Home Super Saver Scheme, HomeBuilder grant or first home owner grants and concessions.

However these other programs apply their own eligibility criteria and conditions. You should make your own enquiries with the relevant government agencies on the terms of these other programs.

6.3 WHEN DO I NEED TO MOVE INTO MY HOUSE?

The Scheme requires that if you purchase an existing property, you need to move into the property within six months of settlement of your eligible home loan.

If you purchase off-the-plan or build a new home, you need to move into the property within six months of an occupation certificate being issued. You can find out more information about timeframes for new homes under the FHLDS (New Homes) and the First Home Loan Deposit Scheme on our website or by contacting a participating lender.

6.4 WHAT HAPPENS IF I MOVE OUT OF MY HOUSE?

You need to continue to live in your property for so long as your home loan has a guarantee under the Scheme.

If you don’t live in your property – including if you move away for an extended period and your home becomes an investment property (i.e. you rent it out to tenants), then your home loan may no longer be guaranteed under the Scheme. If your move is a temporary one and you do not rent out your house (i.e. it remains your home) then your home loan may continue to be guaranteed under the scheme.

Members of the Australian Defence Force (ADF) are still required to be owner-occupiers under the FHLDS. However if the ADF borrower(s) is unable to meet the owner-occupier requirement because of their duties, the borrower(s) can still be eligible if, at the time of entering into their loan agreement, they intend to live in the property.

Before moving out (or if you believe you may need to move out), you should discuss this with your lender so that you are fully aware of your responsibilities under the Scheme and the policies of your lender. If your home loan is no longer guaranteed under the Scheme, your lender may require you to take certain actions including paying fees and/or charges or taking out lenders mortgage insurance.

6.5 WHAT HAPPENS IF I NEED TO SELL MY HOME?

You can sell your home at any time even if your loan is guaranteed under the Scheme. The guarantee will cease when the home is sold.

6.6 CAN I SELL MY HOUSE AND BUY ANOTHER ONE AND KEEP THE GUARANTEE?

No, the Scheme is only available for first home buyers. The purchase of a second home would mean that you do not meet the eligibility criteria for the Scheme.

6.7 WHAT HAPPENS IF I CAN’T AFFORD MY MORTGAGE REPAYMENTS?

Guaranteed home loans under the Scheme are subject to usual lending arrangements by participating lenders and relevant consumer laws.

If you are having, or expect that you will have, difficulty in meeting your repayments, you should contact your participating lender at the earliest opportunity to discuss your situation.

6.8 WHAT IF I WANT TO WITHDRAW FROM THE SCHEME?

If you’d like to cancel or withdraw from the Scheme, contact your participating lender.

 

Section 7 – Financial Difficulty

7.1 I AM EXPERIENCING FINANCIAL DIFFICULTY, WHERE CAN I GET MORE INFORMATION?

  1. Australian Securities and Investments Commission’s MoneySmart website – www.moneysmart.gov.au
  2. Australian Bankers’ Association’s financial difficulty website – https://www.ausbanking.org.au/campaigns/financial-hardship/
  3. Financial Counselling Australia – www.financialcounsellingaustralia.org.au

 

Section 8 – COVID-19

8.1 CAN I GET AN EXTENSION TO MY 90 DAY PRE-APPROVAL PERIOD?

In general, if you are unable to find a property and enter into a contract sale prior to the expiry of your pre-approval under the First Home Loan Deposit Scheme, you may be able to apply for an extension for another 90 days. We recommend that you contact your lender at least two weeks prior to the expiry of your pre-approval to allow your participating lender sufficient time to determine whether you are in fact eligible and process your extension request.

Please note if you are seeking an extension under the FHLDS (New Homes), contact your Participating Lender for further details.

8.2 WHAT IF I CAN’T OBTAIN MY CITIZENSHIP CERTIFICATE BEFORE SETTLEMENT?

To be eligible under the Scheme, first home buyers must be an Australian citizen by the date they enter into their home loan agreement with a Participating Lender.

Your Participating Lender will require you to provide evidence of your citizenship. A letter that your application to become a citizen has been approved is not sufficient. This is because you still need to complete the final step of making a pledge of commitment to Australia before you can become a citizen.

8.3 WHAT IF I AM EXPERIENCING FINANCIAL HARDSHIP DUE TO COVID-19?

Participating lenders are permitted to offer hardship support for guaranteed loans as they would do under their normal lending practices.

The Scheme does not change the obligations of a participating lender to comply with relevant laws and follow its own policies in relation to any circumstances of hardship.

FHLDS (New Homes) FAQs

WHAT IS THE FIRST HOME LOAN DEPOSIT SCHEME (NEW HOMES)?

In the 2020-21 Federal Budget, the Australian Government announced an additional 10,000 places as a time limited expansion of the First Home Loan Deposit Scheme (FHLDS) for the 2020-21 financial year to support economic stimulus measures and to create jobs in the residential construction sector.

These additional 10,000 Scheme places are known as the First Home Loan Deposit Scheme (New Homes) or FHLDS (New Homes) places, as they are only for new homes (that is, to enable first home buyers to purchase a newly built home or to build a new home).

WHAT ARE THE KEY FEATURES OF FHLDS (NEW HOMES)?

The key features of FHLDS (New Homes) include:

  • providing an additional 10,000 places for new homes only
  • places only available until 30 June 2021
  • higher property price caps
  • provides more support for off the plan purchases
  • shorter contract, start and finish build times to assist with stimulating the residential construction sector.

WHAT ARE THE PROPERTY PRICE CAPS FOR FHLDS (NEW HOMES)?

You can find the property price caps for the FHLDS (New Homes) on the NHFIC website.

WHO IS ELIGIBLE FOR FHLDS (NEW HOMES)?

You can use the eligibility tool on the NHFIC website to see if you are eligible for FHLDS (New Homes).

  • Australian citizens who are at least 18 years of age. Permanent residents are not eligible.
  • Single applicants with a taxable income of up to $125,000 per annum for the previous financial year and couples with a taxable income of up to $200,000 per annum for the previous financial year. For all FHLDS (New Homes) applications made from 2 November 2020 to 30 June 2021, the relevant financial year assessed will be 2019-20.
  • Couples are only eligible for FHLDS (New Homes) if they are married or in a de-facto relationship with each other. Other persons buying together, including siblings, parent/child or friends, are not eligible for FHLDS (New Homes).
  • FHLDS (New Homes) assists single (individual) applicants and couples (together) who have at least 5 per cent of the value of an eligible property saved as a deposit. If 20 per cent or more is saved, then the home loan will not be covered by FHLDS (New Homes).
  • Loans under FHLDS (New Homes) require scheduled repayments of the principal and interest of the loan for the full period of the agreement (with limited exceptions for interest-only loans, which mainly relate to construction lending).
  • Applicants must intend to be owner-occupiers of the purchased property (see FAQ below on ADF members). Investment properties are not supported by FHLDS (New Homes).

WHAT ARE THE ELIGIBLE PROPERTIES UNDER FHLDS (NEW HOMES)?

Eligible FHLDS (New Homes) properties include:

  • newly constructed dwellings (e.g. whether a freestanding house, townhouse or apartment)
  • off-the-plan purchase (e.g. whether a freestanding house, townhouse or apartment)
  • house and land packages
  • land and a separate contract to build a new home.

Spec dwellings are also eligible, and for the purposes of FHLDS (New Homes), should fall under one of the categories above.

WHAT IS A NEWLY-CONSTRUCTED DWELLING?

Under FHLDS (New Homes), a newly-constructed dwelling refers to properties that completed construction on or after 1 January 2020 and:

  • has not previously been sold as residential premises or previously been the subject of a long-term lease (i.e. 50 years or more). However, properties which have been substantially renovated by the vendor or built by the vendor to replace a demolished premises (i.e. a knock down and rebuild) are eligible;
  • has not previously been rented or leased, or made available for rent or lease, as commercial residential or residential purposes;
  • has never been lived in; and
  • capable of being lived in from the date you settle.

First home buyers looking to purchase a property to do their own substantial renovations or knock down rebuilds are not eligible for FHLDS (New Homes).

WHAT ARE THE CONTRACT TIMEFRAMES FOR NEWLY-CONSTRUCTED DWELLINGS?

First home buyers looking to purchase a newly-constructed dwelling must enter into a contract of sale by the end of their 90 day pre-approval period and move into the property within six months of the settlement date of the home loan.

WHAT IS A SUBSTANTIAL RENOVATION?

Under FHLDS (New Homes), a substantial renovation results in a newly constructed dwelling when the renovation:

  • results in the removal or replacement of all, or substantially all, of the building (whether or not the renovations involve the removal or replacement of foundations, external walls, interior supporting walls, floors or staircases);
  • affects the dwelling as a whole (it cannot just be one part of the building e.g. a kitchen and/or bathroom renovation); and
  • was undertaken while the property was owned by the vendor prior to it being sold to an eligible first home buyer.

First home buyers looking to purchase a property to do their own substantial renovations or knock down rebuilds are not eligible for FHLDS (New Homes).

WHAT IS AN OFF-THE-PLAN PURCHASE UNDER FHLDS (NEW HOMES)?

An ‘off the plan’ purchase is where you enter into a contract of sale for the purchase of a property where, at that time of entering into the contract of sale:

  • the title to the property has not yet been issued, or
  • if title to the property has been issued, it cannot yet
  • be legally occupied, for example the building of the property has not yet finished.

If you are not sure whether a particular property you plan to buy is an eligible ‘Off-the-Plan’ purchase under FHLDS (New Homes), then you should speak to a participating lender and/or seek your own independent financial and legal advice.

HOW MUCH TIME DO I HAVE TO SIGN A CONTRACT OF SALE OR ENTER INTO A BUILDING CONTRACT?

You generally must enter into a contract of sale and, if you are building, an eligible building contract, within 90 days being advised you have been pre-approved for a Scheme place. No extensions from this requirement can be given.

If you are unable to enter into these contracts by the end of your Scheme pre-approval period, your reservation will expire and your ability to be able to secure another Scheme place will depend on whether one is available at the time your Participating Lender is able to make a new reservation for you.

DOES A NEWLY CONSTRUCTED DWELLING NEED TO BE COMPLETED BEFORE OR AFTER A CERTAIN DATE TO QUALIFY?

Yes. The dwelling must be completed on or after 1 January 2020. If it was completed before 1 January 2020, it will not be an eligible property for the FHLDS (New Homes).

DOES MY CONTRACT OF SALE AND/OR BUILDING CONTRACT NEED TO BE ENTERED INTO BEFORE OR AFTER A CERTAIN DATE TO QUALIFY?

Yes. If you are building your new home or purchasing an off-the-plan property, then your eligible building contract or contract of sale must be dated on or after 7 October 2020.

HOW MUCH TIME DO I HAVE TO BUILD A NEW HOME?

Broadly, you will have six months from the date you enter into a contract of sale or, if you are building, the date of your eligible building contract, to start building and 24 months after construction has commenced to finish building your new home.

WHEN DO I NEED TO MOVE INTO THE PROPERTY?

Generally, you must move into the property within six months of the date your home loan settles or, if you are building, an occupancy certificate being issued.

ARE THERE WAITING LISTS FOR FHLDS (NEW HOMES) PLACES?

NHFIC does not accept applications or maintain a waiting list for places under FHLDS (New Homes). It is at the discretion of each lender as to how they maintain their borrower demand. Contact a participating lender to find out more.

DO AUSTRALIAN DEFENCE FORCE MEMBERS NEED TO BE OWNER-OCCUPIERS UNDER FHLDS (NEW HOMES)?

Members of the Australian Defence Force (ADF) are still required to be owner-occupiers under FHLDS (New Homes). However if the ADF borrower(s) is unable to meet the owner-occupier requirement because of their duties, the borrower(s) can still be eligible if, at the time of entering into their loan agreement, they intend to live in the property.

CAN AN EXISTING FHLDS PLACE BE TRANSFERRED TO THE FHLDS (NEW HOMES)?

If you have an existing place reserved under FHLDS, you cannot reserve a place under the FHLDS (New Homes) unless you have confirmed to your Participating Lender that you no longer require your existing FHLDS reservation and your Participating Lender has withdrawn your existing FHLDs reservation.

At any one time, you can only have a reservation under FHLDS or FHLDS (New Homes), but not both.

If you ask your Participating Lender to withdraw your existing place reserved under FHLDS and a place under the First Home Loan Deposit Scheme (New Homes) is not available, you may not be able to obtain a new reservation under FHLDS if, at the time, no places under FHLDS are available (and vice versa).

FHLDS (New Homes) Scenario examples

A first home buyer is looking to purchase an inner-city terrace under FHLDS (New Homes) in November 2020. The terrace retains the heritage facade and core structural beams but has been completely gutted and rebuilt by the current vendor, with works completed in October 2020.

This property could be eligible as a ‘Newly Constructed Dwelling’ because the vendor has substantially renovated the dwelling prior to selling it to the first home buyer.

A first home buyer has purchased and settled on a house on 22 October 2020 and is looking to substantially renovate under FHLDS (New Homes). The works include full renovations of the kitchen and 2 bathrooms, new flooring throughout, landscaping and a new driveway. The bedrooms and outer structure will not be altered.

This property is not eligible under FHLDS (New Homes). This is because under FHLDS (New Homes), a first home buyer can only buy a new home which has been substantially renovated (or was a knocked down and re-built) by the vendor.

The first home buyer cannot themselves purchase an existing home and plan to undertake a substantial renovation of an existing home or knock down and re-build.

A couple sign a contract of sale dated 7 October for an off the plan property, looking to use FHLDS (New Homes). Construction is scheduled to commence in December 2020. Construction is expected to be completed in November 2021.

This property could be eligible for a FHLDS (New Homes) because:

  • the contract of sale is dated on or after 7 October 2020;
  • construction is scheduled to commence within 6 months of the date of the contract of sale; and
  • construction is scheduled to complete within 24 months of the date of the contract of sale.

A couple sign a contract of sale for an off-the-plan property in November 2020. Construction is scheduled to commence in September 2021 and complete by October 2022.

Not eligible – whilst the completion date is within 24 months, the date construction commenced is outside the 6 months required for commencement.

A borrower is looking to purchase in a new development in an outer city suburb. The dwelling was completed in August 2020. The borrower signs a contract of sale on 8 October. No tenants will have occupied the house prior to the borrower settling and the vendor has not advertised the place prior.

This property could be eligible for a FHLDS (New Homes) as a ‘Newly Constructed Dwelling’. New completed properties after 1 January 2020 that have not been lived in, rented or made available for rent are eligible.

A couple is looking to purchase a newly built house using FHLDS (New Homes) in a new development in the outer suburbs of one of Australia’s capital cities. Construction was completed on 30 June 2020. The property was advertised for rent by the vendor on numerous platforms but did not have any takers.

Not eligible. This is because the property was made available for rent whilst it was owned by the vendor.

 

 

 

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Surfers Paradise QLD 4217

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With 10 years of experience and working with many Developers all over Australia. Luxury Homes Australia knows how to help you to succeed in the property market.

CONTACT US

Mobile: 0409 255 072   Office 1300 680 690
info@houlamation.com
Level 13/50 Cavill Ave. Surfers Paradise QLD 4217

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