But before that happens, there’s still a bit to do. Fees to pay; processes to understand; grants to apply for.

How much is stamp duty? Will you have to pay it, and – if so – which government grants can offset the costs? When’s the best time to buy… and how can you go about it?

Below, mortgage broker Dan Hustwaite joins us for the third and final part of our trilogy for first-home buyers. Together, we’ll walk you through that final step of the way – and up to your new front door.

 

Stamp duty: do you have to pay it?

Stamp duty is a government tax on your home purchase. (It also applies when you buy a car – or take out an insurance policy.)

Outside of the deposit, this fee will be your biggest upfront outlay.

So how much is stamp duty?

This depends on a range of factors, including:

• Where you live
• Whether you plan to live in the property or rent it out
• What type of property you’re buying: is it an existing home, a new build or vacant land?
• Whether you’re a first-time home buyer

Since you are a first-time home buyer, we’re particularly interested in that last point.

So what are the rules? Dan explains.

“If you’re a first-time home buyer, you’re eligible for a stamp duty waiver on a purchase of up to $600,000 – so no stamp duty. When the purchase price exceeds $600,000, concessions are available on a sliding scale, up to $750,000. Beyond that, you’ll have to pay stamp duty.”

For an indication of how much stamp duty you can expect to pay, the Victorian State Revenue Office’s stamp duty calculator can help.

 

The costs of buying your first home: explained

Even outside of the deposit you’ve already saved (and the mortgage you’ll be paying back), buying your first home is expensive.

So – stamp duty aside – what other fees will you encounter?

Transfer of land fees	A cost the state government levies to transfer the home’s title to your name.	Calculate your transfer of land fees cost
Inspection fees	To avoid any nasty surprises when you move in (think termites or other unwanted housemates) you’ll need to have the property inspected.	$500+
Conveyancing and legal fees	The costs involved to hire a conveyancer to draft your settlement documents, check the titles and review your contract.	Around $1,500
Mortgage registration fee	A small state government fee to cover the registration of your mortgage.	$121.40 (Victoria)

 

Beyond this, you’ll want to budget for the costs of moving, as well as connecting utilities such as electricity, gas and phone. Home insurance, too – if you have a mortgage, it’s mandatory.

If you don’t have a 20% deposit, you’ll also be liable for Lender’s Mortgage Insurance (LMI) – a fee you can learn more about in Part One of this trilogy.

 

Helping hands: two useful government grants

With such a spread of fees and taxes to think about, it can be easy to get fed up – and frustrated with the government.

But what the state can take away, it can also give back.

Take the First Home Owner Grant (FHOG), for instance – a national scheme administered at the state level. It’s a $10,000 subsidy available for those buying a new home – so it can’t have been previously occupied, rented out or sold.

Another leg-up comes in the form of the First Home Loan Deposit Scheme, run by the National Housing Finance and Investment Corporation (NHFIC).

“Under this scheme,” Dan explains, “you can purchase a property with as little as a 5% deposit – and the government will guarantee that loan. This means you won’t have to pay that LMI premium, as you normally would with less than a 20% deposit.”

The main condition? That you’re buying your first home.

The only catch? That the scheme comes on a first-come, first-served basis.

“With the First Home Loan Deposit Scheme,” Dan continues, “limited spots are available. Not every lender participates, either – so you can’t simply go to any bank for it.

“10,000 places are released every year – the last release was 1 July 2022. So timing is imperative.”

 

When’s the best time to buy in Melbourne?

The time that’s right for you to purchase your first home is a highly personal thing.

But if there is ever a perfect time, Dan explains, it’s now.

“Your first house doesn’t have to be your dream home – and it doesn’t have to be the property you’ll live in for the rest of your life. But I think you should get into the market as soon as possible.

“Yes, the market can fluctuate. But Melbourne prices have been rising progressively – particularly since COVID-19 hit. So my recommendation is to buy something as soon as you can. Then, you’re in the market – and getting the benefits of property prices as they continue to grow.”

 

Finding a home. Building a life

Over the last three articles, we’ve walked you through every aspect of purchasing your first home.

From saving your deposit and building your credit rating to understanding and applying for a mortgage, you’ll soon be signing on that dotted line.

Now, it’s time to find your future home – something we can help with.

Head to our listings page to start exploring. You can filter houses by price or date of inspection/auction, as well as sort by suburb.

We release new properties all the time – so be sure to check our listings every day for fresh additions and subscribe to our email list.

 

Ready to buy? We’re here for you

Then, you’ll be ready to start viewing a range of prospective first homes. Our agents will help arrange private inspections, or you can pop into one of the many open home viewings we run each week.

So good luck, and have fun. Embrace the challenges of the first-time home buying journey. The twists and turns of the tale; the trials and tribulations of the trek. The process may have its lows, and its tough moments.

But rest assured that the high – owning your own home – is worth every one. After all, there are few better feelings than penning your name on the dotted line of that deed.

Your signature; your house; your future. Enjoy!

Thanks for joining us – and Dan – over three articles. If you missed the first two in our series for first-home buyers, be sure to loop back to Part One (Saving a Deposit) and Part Two (Securing a Mortgage).

Did this article help you buy your first home? Let us know – we’d love to tell your story.

 

 

A quick note from us: the information in this article is of a general nature, intended to offer some helpful guidelines and tips. It doesn’t constitute professional financial advice – for that, Dan and the team at Aqua Financial Services can help!