Between interest rates, the cost of living and inflation, saving for a first home or investment property often feels out of reach. And while it’s no easy feat, there are several clever ways – from leveraging government incentives to strategic saving tips – that can help get your hard-earned cash working harder, sooner. Here’s what first home buyers and investors need to know.

Top first home buyer tips

Owning your own home is the Aussie dream, and despite what you might read, it is still achievable. Here are eight of the best tips to help you get into your first home sooner:

1.    Government incentives galore

The Federal Government currently offers a variety of first-home buyer schemes and initiatives to help first-home buyers, investors, and rentvestors enter the market sooner and with smaller deposits. Additionally, state-based stamp duty concessions and shared equity programs are available. These incentives can help you get a foot on the property ladder when it might seem out of reach, so it’s worth understanding if they’re available to you. The Australian Taxation Office (ATO) and Housing Australia websites are where you can find all the ins and outs of each scheme; however, here’s a topline summary:

●     First Home Guarantee (FHBG)

Wondering how much deposit you need? The FHBG is designed to help you buy a home sooner by reducing your upfront costs. If you meet the eligibility criteria, Housing Australia will guarantee part of your home loan, allowing you to buy a home with just a 5% deposit and avoid paying Lenders Mortgage Insurance (LMI). Key details of the scheme are:

• Only a 5% deposit required (subject to financial assessment).
• No LMI thanks to a government-backed loan guarantee.
• Available to Australian citizens/permanent residents earning under $125k (single) or $200k (couple).
• Applies to a range of property types including existing homes, house and land packages, land and build contracts, and off-the-plan dwellings.

●     First Home Owner Grant (FHOG)

The FHOG is a national initiative administered by each state and territory individually, with varying rules and payment amounts. For example, the First Home Owner Grant in Victoria offers up to $10,000 for newly built homes valued up to $750,000. Unlike some other schemes, it’s not means-tested, so your eligibility isn’t based on income. Key points of the scheme include:

• Administered by states/territories under their own legislation.
• Not subject to income or financial eligibility criteria.
• Grant amount ranges from $10,000 to $35,000, depending on the state and your financial situation.
• Only available for newly built homes or off-the-plan purchases.
• In the ACT, the FHOG has been replaced by the Home Buyer Concession Scheme (HBCS) with different eligibility criteria and usage terms.

●     Stamp duty concessions or exemptions

If you’re a first home buyer, stamp duty concessions or exemptions could save you tens of thousands. Many states now offer relief for first home buyers on this often-overlooked expense if you meet the relevant criteria. The key points to understand are:

• Stamp duty is a state or territory tax charge applied to all property purchases.
• Accessing a concession or an exemption can save you thousands on your first home, making getting on the property ladder more achievable.
• Savings depend on location and purchase price thresholds. You may be eligible for reduced, or in some cases, zero stamp duty – check your local government site for details.

●     First Home Super Saver Scheme (FHSSS)

The FHSSS helps first home buyers save for a deposit faster by utilising super contributions. Managed by the ATO, you can make voluntary contributions (up to a specific limit) to your super, then withdraw them (plus earnings) once you're ready to buy. Here’s a quick breakdown of this sometimes tricky-to-understand scheme:

• You can contribute up to $15,000 per financial year, capped at $50,000 total across all years.
• Your contributions can be before-tax (concessional) or after-tax (non-concessional). 100% of non-concessional contributions can be withdrawn, while 85% of concessional contributions can be withdrawn.
• Concessional contributions are taxed at only 15%, which is usually lower than your income tax rate.
• When you withdraw funds, a 30% tax offset will be applied, and the withdrawals may affect your tax return.
• You must be 18 years or older when you apply, be a first home buyer, intend to live in the property for at least 6 months, and apply for FHSS determination before your purchase.
• FHSS is not eligible for use on vacant land (unless you plan to build), houseboats, motorhomes, or commercial property.
• If the funds aren’t used for a home, they’ll remain in your super until retirement.

With the numerous schemes and incentives available at both national and regional levels, we recommend discussing your options with a financial advisor and reviewing all the schemes in detail on both the ATO and Housing Australia websites.

2.    Save strategically

The key to saving for your first or next home faster is implementing simple strategies that build momentum over time and don’t require you to live on a diet of instant noodles and canned tuna. To get started, utilise ready-made budgeting apps like Pocketbook, Frollo, or Up Bank, and set up a weekly or fortnightly automatic transfer into a savings account. They’ll also help you identify areas where you can cut back on spending, such as eating out or unused subscriptions. Make sure you maximise the money you save too by chatting to your bank about the best interest-earning account for your hard-earned cash. Keep in mind that the interest you earn is usually taxable, so you’ll need to include it in your tax return.

3.    Clean up your finances

Do you know what your credit score looks like? It could affect your ability to get a home loan. Firstly, utilise free services like Equifax or Credit Simple to get valuable insight into how your financial health appears to outsiders. Simple fixes, such as reducing your credit card balance and closing unused bank accounts, can help improve your credit score, so take care of these now. Next, you’ll want to tackle any lingering debts, such as car payments, student loans, or electronics bought on hire purchase. Start with the smaller ones and work to clear as much as possible. Finally, ensure that you consistently pay your bills on time (setting reminders or using direct debits works well), as late payments can also negatively impact your credit score.

4.    Compare lenders and seek pre-approval

Once you’ve built up some savings and cleaned up your credit, it’s time to get an understanding of how much you may be able to borrow and what your repayments might look like. Speak with a mortgage broker or several banks directly to compare what’s on offer. While pre-approval isn’t the same as a fully approved home loan, it gives you an indication of how much you can borrow based on a preliminary look at your financials. This will help you narrow down your search for a home that falls within a realistic price range. Keep an eye out for special offers from lenders as well – they often have cashback deals, fee waivers, and discounts on bundled products like insurance, which can help reduce your overall costs.

5.    Be aware of additional costs

You’ve got your deposit sorted, but don’t stop saving just yet. There are a few other (often forgotten) costs you’ll need to plan for that come hand in hand with buying a home. These include stamp duty (which can be up to 5% of the property’s purchase price), legal fees, building inspection costs and bank fees. This helpful online calculator from ING provides a comprehensive summary of the real costs associated with buying a property. Don’t forget your moving costs too – keep these to a minimum by starting the decluttering process well before you’ve got a moving day locked in.

6.    Stay informed

The path to buying a home can be bumpy and ever-changing, particularly around election years. Keep informed about changes to things like grants, property trends and property price forecasts by signing up for newsletters from key resources. Housing Australia, your State Revenue Office, the ATO, Canstar and CoreLogic Property News are good places to start. By staying abreast of updates and current property news, you’ll be able to make quicker, more confident decisions when it comes time to buy. And of course, the team at First National Real Estate is here to support you with expert real estate advice and local insights to guide you on the path to your first home, too.

7.    Get well acquainted with interest rates and market conditions

Is it a good time to buy a house? Interest rates and market conditions play a crucial role in how much you can borrow and the overall cost of your home loan, so you’ll need to get closer to these than ever before. Consider factors that directly impact rates, such as OCR announcements, and how international conditions, including economic uncertainty and inflation, can also cause fluctuations. While rates have risen recently, they remain relatively low compared to historical averages, making now a good time to get on the property ladder if you’re ready to go.

8.    Build a relationship with local real estate professionals

Local real estate agents at First National Real Estate and mortgage brokers bring valuable market knowledge, access to off-market listings, and guidance tailored specifically to your region – all of which can give you a valuable edge. They’ll have on-the-ground insights into things like upcoming developments in the area that can boost or bust property values, knowledge about homes that may come up for sale soon, and insight into lending products that will suit you best. By keeping in regular communication with these local industry professionals, you’ll stay top of mind when new opportunities arise

Top investor tips

If you’ve already got a foot on the property ladder and are looking to expand your portfolio, many of the above tips still apply. Still, there are some essential investor-specific tips you should also consider. Here are six of the most critical:

1.    Leverage your equity

If you already own a home, you may be able to fast-track your next purchase by tapping into your existing equity. Equity is the difference between your home’s market value and what you still owe on your mortgage. For example, if your home is worth $700,000 and you owe $500,000, your equity is $200,000. You may be able to access up to 80% of your equity, which is $160,000. This means you won’t have to save the full deposit amount, and you’ll be able to scale your property portfolio faster.

2.    Take advantage of tax benefits

From claiming deductions on loan interest and property management fees to using depreciation on eligible assets and claiming body corporate fees, there are several ways to reduce your tax burden as a property investor. Understanding what you can claim and keeping concise records throughout is key. In addition, you can look at strategies like negative gearing, and reduce your tax burden by getting clear on Capital Gains Tax concessions. Here’s the low-down:

• Negative Gearing
  Negative gearing is a tax strategy that property investors can use when the costs of owning an investment property exceed the rental income it generates. This loss can be offset against other taxable income, such as your salary, reducing the amount of annual tax you pay overall. It can have a significant financial impact and is worth considering as part of your investment plan.
• Capital Gains Tax (CGT) concessions
  When you sell an investment property, the profit you make is typically subject to Capital Gains Tax. However, if you’ve owned your investment property for more than 12 months, you may be eligible for a 50% discount on the capital gain payable. This CGT concession significantly reduces the tax burden on your investment gains, making it an important upfront consideration when investing in property.

3.    Structure your loans wisely

Setting up the right loan structures from the outset will boost your cash flow and give you more flexibility to keep building your property portfolio. Structures like interest-only loans may be helpful in the early years of investing, but they are often not a good long-term option. Features like offset accounts will allow you ongoing access to funds while reducing your interest payments. Consider whether a fixed, variable, or a combination of the two loan types will best suit your strategy. And while it can be tempting to use equity in multiple properties to build your portfolio, keeping your loans separate for each property will give you greater control and fewer restrictions overall. Speaking to an experienced financial advisor will help you determine the best approach for your needs.

4.    Government incentives and schemes

While most first-home buyer incentives don’t apply when purchasing an investment property, there are still some state-specific and federal schemes that support investors. In states such as Victoria, Western Australia, the ACT, Tasmania, the Northern Territory, and NSW, there are various concessions on stamp duty, particularly for new builds. In NSW, for example, if you buy a home off the plan, you could benefit from up to an additional 12 months to pay transfer duty. 

5.    Choose the right location for your investment

The adage location, location, location, still rings true when it comes to wise property investment. You really can’t do enough research, and alongside this, leverage the expertise of the property professionals at First National Real Estate. They’ll help you identify opportunities that align with your goals and provide first-hand knowledge of growth areas, upcoming infrastructure projects, rental vacancy rates and best rental yield suburbs – all of which are crucial for a successful investment. First National Real Estate's interactive ‘Your Patch’ tool is a great place to start your search, too!

6.    Run the numbers

Owning an investment property isn’t just a matter of watching the rent roll in week after week. There are plenty of costs involved – from maintenance to property management fees, rates, insurance, and loan repayments, too, of course! You’ll also need to be prepared to cover the inevitable vacancy periods between tenants. Ideally, your rental income will cover all of these expenses (and generate a profit), but getting to that point can often take a while, particularly if you have a sizeable loan. You’ll need to approach your investment with a clear goal in mind – if you’re seeking positive cash flow properties in Australia, careful location research and cost projections are crucial.

Whether you’re buying your own home or investing, you must:

• Carry out a thorough inspection

  Aside from ticking the due diligence box, thorough building inspections are essential to avoid unexpected expenses down the line. They’ll help you uncover any hidden problems, such as structural issues, roofing damage, mould, ventilation issues, and water or pest damage that you may not have spotted during open homes. This will help you understand the real cost of a property – once repairs are factored in – and can also be used to negotiate a fair price.

• Leverage tech and digital tools

  Forget flipping through the real estate section of your Sunday paper; today, we’ve got a wide range of digital tools at our fingertips to help hunt out the perfect property, any day of the week. Whether it’s apps or websites like Your Patch, realestate.com.au, or Domain to help you track or research properties, bank-aligned tools to help you work out your borrowing power, or online credit check tools, technology has streamlined the research and buying process, making the whole experience more efficient and less stressful.

• Understand contract terms and legal obligations

  The real estate world is filled with legal jargon and confusing terms that can trip up even the most savvy buyers. There are terms like cooling-off periods, encumbrances, and easements, and having the conveyancing process explained by a property lawyer or solicitor is invaluable. They can help you identify any risks, clarify your obligations, and ensure you’re legally protected throughout the entire process.

From planning to purchase, home ownership isn’t out of reach

Buying your first home – or an investment property – isn't just about luck or timing; it's an achievable goal for those who are well-prepared. With the right strategy, expert advice, smart tools, and a solid grasp of the incentives available to you, getting onto the property ladder becomes much easier. The most important step? Don’t navigate this journey alone. First National Real Estate is here to guide and support you every step of the way.

DISCLAIMER
The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial, or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial, or real estate decisions. Click here for full Terms of Use.