Plain practical advice for Australian builds. No fluff.
FHOG Eligibility and Amounts by State
The First Home Owner Grant varies dramatically across Australia. As of 2024, New South Wales offers no FHOG for established homes but provides stamp duty exemptions up to $800,000 for new builds. Victoria offers $10,000 FHOG for new builds or substantially renovated homes valued under $750,000. Queensland provides $15,000 for new homes under $750,000. South Australia offers $15,000 for new builds or substantially renovated properties purchased or built for under $650,000, with reduced concessions up to $750,000. Western Australia provides $10,000 for new or substantially renovated homes under $750,000. Tasmania offers $20,000 for new builds valued under $750,000. Northern Territory provides $10,000 for established homes and up to $26,000 for new builds depending on location. Australian Capital Territory offers no FHOG but provides stamp duty concessions.
Eligibility rules are strict. You must be 18 or over, an Australian citizen or permanent resident, never owned property in Australia before (or your spouse/partner), and you must occupy the property as your principal place of residence for at least six continuous months (12 months in some states) commencing within 12 months of completion. For new builds, construction must commence within 26 weeks of the contract date in most jurisdictions. Check your state revenue office website for current thresholds as these change annually.
HomeBuilder and Other Federal Schemes
The HomeBuilder grant closed to new applications in April 2021 but taught many first-timers valuable lessons about construction timelines and contract requirements. Current federal support focuses on the First Home Guarantee (formerly FHLDS) administered by the National Housing Finance and Investment Corporation. This scheme allows eligible first home buyers to purchase or build with as little as 5% deposit without paying lender's mortgage insurance, with the government guaranteeing up to 15% of the property value.
The First Home Guarantee has 35,000 places annually (as of 2024) allocated through participating lenders including major banks and some regional lenders. You must be 18 or over, an Australian citizen or permanent resident, earn under $125,000 individually or $200,000 as a couple, and purchase a home under the relevant price cap for your location (ranging from $500,000 in regional areas to $950,000 in Sydney). For new builds, the guarantee applies to both land and construction costs combined. This scheme is particularly valuable in Adelaide and regional South Australia where median new build prices sit comfortably within the $600,000 to $700,000 cap, allowing first-timers to enter the market with $30,000 to $35,000 saved rather than the traditional $120,000 to $140,000 deposit.
What Grants Actually Cover
A critical misconception among first home builders is believing that grants cover a substantial portion of construction costs. A $15,000 FHOG in South Australia represents roughly 4% to 6% of typical build costs for a modest three-bedroom home. This grant is better viewed as helping with upfront costs like council fees, soil tests, engineering reports, initial builder deposits, or upgrades from standard inclusions rather than as a major funding source.
Stamp duty concessions deliver significantly more value than cash grants in most states. In South Australia, a full stamp duty exemption on a $650,000 new build saves approximately $25,650, far exceeding the $15,000 FHOG. In New South Wales, the stamp duty saving on an $800,000 new build is around $31,000. Understanding the combined value of all concessions you qualify for gives a realistic picture of your financial position. Remember that stamp duty exemptions apply to land value plus construction contract combined, and your contracts must clearly separate these amounts for revenue office assessment.
Realistic Build Costs for First-Timers
First home builders typically target entry-level to mid-range construction, which in 2024 runs between $1,800 and $2,800 per square metre for project homes from volume builders. A 150 square metre three-bedroom brick veneer home with single garage therefore costs roughly $270,000 to $420,000 for construction alone, depending on location, site conditions, inclusions and finishes. Regional areas trend toward the lower end while metropolitan fringes with difficult soil conditions push toward the upper range.
These figures assume standard developer lots (relatively flat, cleared, with services to boundary). Add $15,000 to $45,000 for difficult sites requiring cut and fill, retaining walls, longer driveways or service extensions. Standard project home inclusions typically mean laminate benchtops, vinyl plank or carpet flooring, basic tapware, painted render or brick veneer exterior, concrete driveway, and minimal landscaping. Upgrades for stone benchtops, tiled floors throughout, ducted heating and cooling, and better fixtures commonly add $35,000 to $75,000 to base prices. First-timers must understand the difference between advertised facade prices (often shown as display home pricing) versus actual contract prices with site costs and realistic selections included.
Choosing a Builder for Your First Home
First home builders benefit most from choosing licensed volume builders with comprehensive warranty insurance rather than smaller custom builders or owner-building. Volume builders like Metricon, Henley, Weeks, Dennis Family Homes, or Allworth offer fixed-price contracts, predictable timelines (typically 6 to 9 months from slab to handover), and standardised inclusions that simplify decision-making. Their scale means better supplier pricing and established trade relationships, though less flexibility for custom changes.
Verify your builder holds current registration in your state (check the VBA in Victoria, NSW Fair Trading, QBCC in Queensland, CBS in South Australia). Confirm they hold warranty insurance through providers like QBE, CGU or VMIA (Victoria). This insurance, required by law for residential builds over $20,000, protects you if the builder becomes insolvent or fails to rectify defects during the statutory warranty period (6 years for major defects, 2 years for minor defects under Australian Consumer Law). Request copies of insurance certificates before signing contracts. For first-timers in Adelaide, checking the Consumer and Business Services register confirms both builder registration and any disciplinary history. Never accept assurances that insurance will be arranged later or that the builder is too small to require it.
Contract Structure and Progress Payments
Australian residential building contracts follow either HIA (Housing Industry Association) or MBA (Master Builders Australia) standard forms, modified by state legislation. In South Australia, the Building Work Contractors Act 1995 regulates contracts and payment schedules. Your contract must be in writing, include a fixed price or cost-plus with maximum, detail inclusions and exclusions, specify timelines with extension provisions, and outline the dispute resolution process.
Progress payments typically follow 5 to 7 stages: base stage (deposit, usually 5% to 10%), slab down (15% to 20%), frame stage (15% to 20%), lockup (20% to 25%), fixing stage (20% to 25%), practical completion (10% to 15%), and final payment after defects rectification (usually 5%). Never pay more than 10% deposit and ensure payment stages align with actual work completed and inspected. Your lender will require independent inspection at each payment stage before releasing funds. First-timers often face pressure from builders to pay ahead of schedule or outside formal stages. This creates risk if the builder fails or disputes arise. State legislation caps deposits (5% in Victoria and Queensland, 10% in other states) to protect consumers.
Timeline and Occupancy Requirements
Realistic construction timelines for first home builders run 8 to 14 months from contract signing to moving in. This includes 4 to 8 weeks for working drawings and permits, 2 to 4 weeks for site preparation, 4 to 6 months for construction (volume builder standard build), 2 to 4 weeks for practical completion and defects rectification, then final inspections and handover. Delays from weather, material shortages, trade availability, and council inspections commonly extend timelines by 4 to 12 weeks beyond original estimates.
FHOG and stamp duty concessions require you to occupy the property as your principal place of residence within 12 months of completion or settlement. This means you cannot build then immediately rent the property or leave it vacant. For First Home Guarantee purposes, you must live in the property for at least 6 continuous months. Rental or sale before meeting occupancy requirements can trigger repayment of grants and concessions plus penalties. Plan your current rental lease end dates carefully around realistic completion timelines, allowing buffer for construction delays. Many first-timers face expensive short-term rental situations when builds run late, or penalty break-lease fees if they lock in fixed terms that expire too early.
Land Purchase Timing and Finance Sequencing
First home builders face a sequencing challenge: you need land to apply for construction finance, but holding land while finalising builder contracts and awaiting permits costs money in loan interest or delayed grant access. The optimal sequence is to secure pre-approval for combined land and construction finance, identify your land, negotiate builder contracts simultaneously with land purchase (subject to finance), then settle land and construction contracts together or within weeks of each other.
Most lenders offer construction loans structured as interest-only during building (you pay interest only on funds drawn down at each progress payment) then converting to principal and interest once complete. This minimises costs during construction when you are also paying rent elsewhere. However, you will pay interest on the land loan from settlement even before construction begins, typically costing $1,500 to $3,000 monthly on a $300,000 to $400,000 land loan at current rates. Minimising the gap between land settlement and construction commencement saves thousands. Some builders offer house-and-land packages with coordinated settlements, simplifying this process but potentially limiting your land choices or negotiating power on both elements.
