As part of the 2020-21 Federal Budget, the Australian Government has committed an additional 10,000 First Home Loan Deposit Scheme (FHLDS) places for the 2020-21 financial year, specifically for eligible first home buyers purchasing new homes.
Please refer to the 'New Home Guarantee' tab on this page for more on this announcement. Further information and updates will be periodically updated on this page as it becomes available.
Use the Eligibility Tool below to find out whether you meet the Scheme’s eligibility criteria.
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.
The Scheme is open to singles or couples.
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.
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.
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.
The Scheme includes an income test for:
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:
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.
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.
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.
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:
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.
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.
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:
This category does not include ‘off-the-plan’ purchases, which are
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:
These can either be in the same contract or two separate contracts. Your home loan will also include a requirement for you to:
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:
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:
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
If you are making an ‘off-the-plan’ purchase:
You will also need to move into the property within 6 months of the settlement date for your home loan.
For a building contract to be eligible under the Scheme, it must:
‘Owner builder’ contracts are not eligible building contracts for the Scheme.
Not all home loans are able to take the benefit of the Scheme.
The Scheme is restricted to ‘Eligible Loans’, which are home loans:
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.
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.