First time home buyer schemes and income eligibility

I

First time home buyers and government schemes

According to a guide to the schemes, Australia's government home buyer schemes are aimed at several groups, among them first home buyers, single parents and households on lower and middle incomes. The guide, published by Carlisle Homes, sets out the income rules for applicants. Income is one of the main things used to work out eligibility. Thresholds vary between programs, and they can also vary for a single applicant, a couple or a family.

In the guide's account, income limits exist to steer assistance towards lower and middle income households and towards the buyers the schemes are intended to assist. Some programs look at taxable income from an earlier financial year, while others weigh other criteria alongside income. The guide notes that limits change over time and suggests checking current requirements before applying.

II

Which schemes set an income cap

The guide lists five government programs and whether each one uses an income cap. The First Home Guarantee, which is aimed at buyers purchasing with a low deposit, has no specific income cap in the guide's list. The Family Home Guarantee does apply one and targets single parents and legal guardians with dependent children. Help to Buy also applies a cap and is aimed at lower and middle income Australians seeking shared equity support.

The remaining two programs in the list have no specific income cap either. The First Home Super Saver Scheme is for buyers building a deposit through voluntary contributions to superannuation, and the Regional First Home Buyer Guarantee is for first home buyers purchasing in regional areas. The guide adds that income thresholds, property caps and other requirements may change over time.

III

How scheme administrators assess income

The guide says the income figure used is usually taken from what is reported to the Australian Taxation Office, and that applicants are generally asked to show evidence of their taxable income. The exact method can differ from one program to another.

Income that the guide says may be considered includes salary and wages, PAYG income shown in a tax return, commissions and bonuses, pay for overtime, income from investments, some government payments or allowances where they apply, and earnings from self employment or a business. Information applicants may be asked to provide includes recent tax returns, notices of assessment, payslips or employment records, and any further documents the scheme administrator or lender asks for.

For a single applicant, the guide says, one income figure is typically used. Couples and joint applicants are generally assessed on their combined household income, so a buyer who qualifies alone may not meet the same requirements when applying with a partner.

IV

Income over the limit, and state schemes

Most government home buyer schemes treat income caps as firm cutoffs, the guide says, so a buyer whose income goes over the limit may miss out on that scheme. Failing to qualify for one program does not by itself close off other kinds of assistance, because each program has its own requirements.

The guide notes that in Victoria, not every government support program uses income caps. Some stamp duty concessions and the First Home Owner Grant are usually tested on the property instead of household income, while other conditions may also apply, such as using the property as a principal place of residence.