Please note: This is my plan for buying my first home in Australia. While I hope you find this interesting, I cannot guarantee that any information herein is currently accurate, nor am I providing general or personal advice. The purpose of this is for myself to refer back to.

Minimising Tax While Saving A Deposit

Australians can redeem up to $30k of voluntary Super contributions (that is, contributions made above the contributions required of an employer) in order to buy a house, with up to $15k of those contributions from any one tax year. This $30k is also set to be increased to $50k in the future, though the $15k annual limit will remain.

The benefit of this saving method is that voluntary Super contributions are taxed at 15%, instead of ~30% of regular income (depending on tax bracket). This is known as the First Home Super Saver Scheme [FHSSS]. I will salary sacrifice full amount that I am able to withdraw ($15k p.a.) to Super to minimise income tax by roughly $4.5k over two years.

I will set my Super to invest in my Super provider’s aggressive profile (“High Growth”) and in Australian shares. This essentially allows for investment in the stock market without having to pay capital gains tax or brokerage fees, another benefit of voluntary Super contributions. My remaining Super will continue to be a compounding investment even after I have taken out the deposit.

Getting A Loan

I will use the Federal Government’s First Home Loan Deposit Scheme [FHLDS] which allows for a minimum 5% deposit (minimum is typically 20%). The FHLDS also covers Lender’s Mortgage Insurance [LMI] (could be a ~$10k saving).

With the $30k saved in super equating to a 5% deposit, the value of the loan can be up to $600k (with many other factors such as income, LVR, credit, etc to be considered). But just because I can get a loan of $600k doesn’t mean that’s how much I want to spend (see stamp duty).

Since this will be my first home, I will be eligible for my State Government’s First Home Owner’s Grant [FHOG] ($15k QLD or $10k NSW depending where I decide to buy). This will help me secure a home loan as this payment is typically taken into account by a lender, and paid directly to them.

ACT doesn’t have a FHOG anymore, but they do have an Affordable Home Purchase Scheme [AHPS].

Minimising Stamp Duty

Stamp duty is a state-based tax paid on the value of the property being purchased. This can be worth tens of thousands, and get quite complicated. There are stamp duty concessions in both Queensland, NSW, and the ACT for first home buyers. So far, I have only researched Queensland as this is where I am most likely to buy:

Queensland Stamp Duty

Queensland concessions can be found here, and the Queensland government has built a useful concession calculator here. If I buy a home worth <$500k then I pay $0, <$550k then I pay $10.8k, <$600k then I pay $12.9k. So I really want to aim for a home <$500k otherwise I immediately lose more than $10k.

Home Purchase In Review

If I am to buy a brand new home in Queensland as per my strategy… essentially I “made” $38k upfront (in terms of savings: $4.5k Super tax savings + $15k FHOG payment + $10k LMI savings + $8.8k in stamp duty concessions). Since I have also managed to shrink the value of my home loan, which is subject to compounding interest, I will have saved myself additional thousands – possibly 5 digits – over the life of the loan.

After Care

I will use an off-set account to keep cash liquid while paying down the interest on the mortgage. After 12 months, I plan to rent out the home as an investment property. I can then leverage equity built in the first home to purchase another property in the future.