First home buyer grant eligibility

This may sound controversial but first home buyer grants can be bad news for some first home buyers. Sometimes they can actually cost you more than you get. Let us explain.

All grants have upper price limits. It's tempting for first home buyers to try to stay under the price limit in order to qualify a government grant. But this isn't such a great idea for those who could afford to spend more & get a better property that will suit them for longer.

Why? Because transaction costs - that’s the cost of buying and selling - will often eat up more than the amount of the grant that you got when you bought. It’s a false economy.

For example: In some states first home buyers can save up to $25K in stamp duty but in order to stay under the threshold they'll either buy something that's too small or not where they really want to live.

If it's too small, you'll outgrow it quickly & need to upgrade. Then you sell & buy the bigger home you should have bought in the first place, incurring selling costs & this time you'll have to pay stamp duty.

You could easily be out of pocket to the tune of $100K within a few short years. Under this scenario your initial stamp duty saving has cost you $75K.

Want to be an educated first home buyer? Check out our online course for first home buyers.

Avoid costly mistakes, make smarter decisions, and get into your first home sooner. Why waste time doing things the hard way?

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