First‑home buyers in 2026 face a complex but rewarding landscape. Three key government schemes – the First Home Guarantee (FHBG), stamp‑duty concessions, and cash grants – can be used simultaneously to slash upfront costs. Stacking them correctly can save you tens of thousands of dollars and reduce your deposit need to as little as 5% without Lender’s Mortgage Insurance (LMI).
This guide explains exactly how each scheme works, which combinations are allowed, and the step‑by‑step process to maximise your savings in 2026.
The three schemes you can stack
1. First Home Guarantee (FHBG) – no LMI with a 5% deposit
The FHBG, administered by Housing Australia, allows eligible first‑home buyers to purchase with a deposit of as little as 5% without paying LMI. The government acts as guarantor for the portion above 80% LVR, covering the lender’s risk.
From July 2026, the FHBG no longer has an income cap. However, price caps apply: Sydney $1.5M, Brisbane $1M, Melbourne $950,000, Perth $850,000, and lower amounts for other cities and regions. You must be an Australian citizen 18 years or older, intend to live in the property, and not have owned property in Australia before.
A key change in 2026: the FHBG is now available for both new and existing dwellings in all jurisdictions.
2. Stamp‑duty concessions – state by state
Every state and territory offers a full or partial exemption from stamp duty for first‑home buyers, subject to property price thresholds and income limits. These are separate from the federal FHBG and can be claimed on top of it.
In 2026, typical thresholds include:
- New South Wales: Full exemption for homes up to $800,000; sliding concession up to $1M.
- Victoria: Full exemption up to $600,000; concession up to $750,000.
- Queensland: Full exemption up to $500,000; concession up to $550,000.
- Western Australia: Full exemption up to $430,000; concession up to $530,000.
Check your state revenue office for precise figures – many have increased thresholds from July 1, 2026.
3. First‑Home Owner Grant (FHOG) – cash for new builds
The FHOG is a one‑off payment from state governments, typically $10,000 to $15,000 for buying or building a new home. It is not restricted to first‑time buyers in all states, but first‑home buyers are usually eligible.
In 2026, most states retain the grant for new homes only. Victoria and NSW offer $10,000; Queensland $15,000; Western Australia $10,000 (for homes up to $750,000). The grant can be used towards your deposit, legal costs, or other upfront expenses.
Can you really use all three together?
Yes – there is no federal or state legislation that prevents you from stacking the FHBG, a stamp‑duty concession, and the FHOG. They are independent programs with separate eligibility criteria. However, you must meet each scheme’s unique requirements.
The FHBG is a federal scheme, while stamp‑duty and grants are state‑based. Because they target different layers of your purchase (deposit, duty, and cash), they complement each other perfectly.
Example stack for a Queensland buyer in 2026:
- Property price: $520,000
- 5% deposit: $26,000 (via FHBG – no LMI)
- Stamp duty: $0 (full exemption up to $500k, sliding concession for $520k – roughly $2,700 saved)
- FHOG: $15,000 (new home)
- Total upfront cash required: around $26,000 deposit + approx $10,000 other costs = $36,000 – compared to a normal 20% deposit of $104,000 plus LMI.
Stacking reduces your cash requirement from over $100,000 to under $40,000.
Step‑by‑step: how to stack schemes in 2026
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Check state caps first. Determine your target property’s price: ensure it falls under both the FHBG price cap for your city (e.g., Sydney $1.5M) and your state’s stamp‑duty exemption threshold.
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Apply for the FHBG through an approved lender. You’ll need a formal approval from Housing Australia. The lender will assess your application, and you must qualify for the loan using the standard 3% APRA buffer. Maximum DTI is 6x your gross income from February 2026.
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Simultaneously lodge the stamp‑duty concession application. Most states let you do this via your solicitor or conveyancer during settlement. You must declare you are a first‑home buyer and that the property meets the threshold.
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Claim the FHOG at the same time. Many state revenue offices allow you to apply for both the grant and the duty concession on the same form. Provide contract of sale, proof of identity, and evidence of first‑home status.
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Use the grant to cover your deposit shortfall or associated costs. The FHOG can be paid directly to your lender or into your account at settlement.
Current interest rate context (July 2026)
The RBA cash rate sits at 4.35%. The lowest variable mortgage rates available to high‑quality borrowers are around 5.69% p.a. With the APRA 3% serviceability buffer, lenders assess your ability to pay at 8.69% – so your borrowing power is limited. Stacking schemes reduces the loan amount needed, which helps you stay within your borrowing capacity.
A couple with combined income of $130,000 can typically borrow up to ~$550,000 (assuming 6x income cap). With a 5% deposit and stamp‑duty relief, they can target homes around $580,000 – significantly higher than if they needed a 20% deposit.
Potential pitfalls to watch for
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Income caps may still apply to some state stamp‑duty concessions. For example, NSW imposes an income limit of $95,000 for singles and $120,000 for couples for the full exemption. If your income exceeds that, you may lose the concession even if the price is under the threshold. Always check your state’s full criteria.
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The FHOG is only for new homes. If buying an existing dwelling, you cannot stack the grant – but you can still use FHBG + stamp‑duty concession.
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Lenders may have overlapping restrictions. Some lenders might not allow you to use the FHBG together with a state grant if it complicates settlement. Work with a mortgage broker (like HomeLoanAI) who knows which lenders permit stacking.
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Settlement timing. The grant and concession must be processed before settlement. Apply early – at least 8 weeks out.
FAQ
1. Can I use the FHBG with a stamp‑duty concession in Victoria on a $800,000 home?
Yes. The FHBG price cap for Melbourne is $950,000, so you’re under that. Victoria’s full exemption applies up to $600,000; for an $800,000 home you get a partial concession, saving roughly $20,000–$25,000 in stamp duty. You can stack both schemes.
2. What if my income is above the state’s cap for stamp‑duty exemption?
You may lose the exemption but still be eligible for the FHBG (no income cap in 2026). You can also claim the FHOG if the home is new. Example: a single buyer earning $110,000 in NSW – they miss the $95,000 cap, so no stamp‑duty concession, but they can still use FHBG + FHOG (for a new home up to $1.5M).
3. Is there a limit on how much I can save by stacking all three?
In a best‑case scenario (e.g., a $500,000 new home in Queensland, income under $125,000), you might pay $0 stamp duty, $15,000 grant, and no LMI, saving roughly $30,000–$40,000 upfront compared to a conventional 20% deposit purchase.
4. Does the 6x DTI cap apply to FHBG loans?
Yes. Lenders must comply with APRA’s February 2026 macroprudential measure that limits loans to six times borrower gross income for new lending. This applies regardless of the guarantee scheme.
5. Can I stack schemes if I’m buying with a friend or partner who is not a first‑home buyer?
Often yes – the FHBG only requires that all applicants are first‑home buyers. If one party is not, you cannot use the guarantee. But stamp‑duty concessions and grants sometimes allow joint applications where one is a first‑home buyer (check state rules). In practice, most first‑home buyer couples both have clean records.
Sources
- Housing Australia – First Home Guarantee Fact Sheet (July 2026)
- Australian Prudential Regulation Authority – Macroprudential Policy Announcement, February 2026
- Reserve Bank of Australia – Cash Rate Decision, June 2026
- Revenue NSW – First Home Buyer Assistance Scheme thresholds (2026–27)
- Queensland Revenue Office – First Home Owner Grant and Transfer Duty Concession Guidelines (July 2026)
Ready to calculate your stacked savings?
Use our borrowing power calculator to see how much you can borrow with a 5% deposit and stacked grants. Then speak with a HomeLoanAI adviser who specialises in FHBG‑eligible lenders.
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Keep reading
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