August 2025

Centrelink & Retirement Planning Seminar – 25th September 2025

First home buyers: Ways to get your foot in the door

If you’re a first home buyer in today’s market, you’ve likely been reading about interest rate cuts – finally, some good news! But then, just as you’re getting hopeful, you check house prices again and… yikes. Affordability is still delivering a cold splash of reality as property prices are predicted to increase over the next year.

If you’re feeling like someone forgot to give you the key, it might be time to look at which path you could tread to your first purchase.

Leverage government support (it’s there for a reason!)

There are a number of schemes and incentives aimed at helping first home buyers – both federally and through the states and territories. Here is a quick overview:

• First Home Guarantee – Allows eligible buyers to purchase with as little as 5 per cent deposit, without paying Lenders Mortgage Insurance (LMI).

• First Home Super Saver Scheme – Use your super to save for a deposit with tax advantages.

• Regional First Home Buyer Guarantee – For eligible buyers purchasing in regional areas and only 5 per cent deposit is required.

• Family Home Guarantee – Allows eligible single parents and single legal guardians of at least one dependent to purchase a home with a deposit as little as 2 per cent.

• A grant or support from your state or territory government – Many states and territories offer grants as one-off payments for eligible buyers purchasing or building a new home as well as reduced or zero stamp duty for first home buyers, often based on the value of the property.

Each state offers its own unique cocktail of grants and concessions, so it’s worth checking out what’s available and we can help you weigh up which one might be the most suitable for your circumstances.

The Bank of Mum and Dad

Still the fastest-growing lender in Australia, parental support is more common than ever. More than 60 per cent of first home buyers in Australia receive some form of financial assistance from their parents to buy their first home.ⁱ

Assistance can be in the form of a gift, a loan or going guarantor. If your folks are open to helping financially, it can make a huge difference.

That said, not everyone has this option, and it’s worth remembering that family money can sometimes come with strings attached.

Consider co-buying with a friend

If you are single, it can be particularly hard to get into the market and buying with a friend can make owning a home more affordable by splitting the deposit and the repayments down the middle. Plus, sharing ongoing costs like maintenance and bills can take some pressure off your budget.

That said, things can get tricky if one of you wants to sell early, or if your priorities suddenly diverge. Legal and financial clarity is essential, so if you go down this path, make sure you’ve got a solid agreement in place and some honest conversations under your belt.

Rentvesting – buy where you can afford, live where you love

Recent research found 54 per cent of first home buyers were considering ‘rentvesting’ to get into the property market, so rentvesting is certainly gaining traction.ⁱⁱ The idea is simple: you buy in a more affordable area and rent where you want to live.

It’s not the traditional white-picket-fence dream, but it can be a clever way to build equity while maintaining lifestyle flexibility.

Compromise to achieve your dream

We know you’d love a three-bedder, walking distance to your favourite café, with a study, backyard, AND water views. But unless you’re sitting on a trust fund, you’ll probably need to adjust your wish list. The three big levers are:

• Location – Look at up-and-coming suburbs or regional areas.

• Condition – A fixer-upper can be a long-term win if you’re handy (or handy with a budget).

• Size – A smaller footprint or apartment can be a smart first step.

Think about your priorities and use the levers above to work within your budget. If you’re still feeling like the great Australian dream is out of reach, take a breath. There are many ways to get into the market, and a little creative thinking can go a long way.  

We help first home buyers like you find your own way in, every day. So, if you’re ready to chat about what your journey could look like, come talk to us.

i https://www.finder.com.au/home-loans/bank-of-mum-and-dad

ii https://www.westpac.com.au/about-westpac/media/media-releases/2025/13-february/

Tax and super

How much tax you pay on your super contributions and withdrawals depends on:

• your total super amount

• your age

• the type of contribution or withdrawal you make

If you inherit someone’s super after they die, the person’s super fund pays you a super death benefit. You may have to pay tax on some of this benefit.

Because everyone’s situation is different, it’s always best to get advice about tax matters. Contact the Australian Taxation Office (ATO) or speak to us.

How super contributions are taxed

Money paid into your super account by your employer is taxed at 15%. So are salary-sacrificed contributions, also known as concessional contributions.

There are some exceptions to this rule:

• If you earn $37,000 or less, the tax is paid back into your super account through the low-income super tax offset (LISTO) .

• If your income and super contributions combined are more than $250,000, you pay Division 293 tax, an extra 15%.

If you make contributions from your after-tax income – known as non-concessional contributions – you don’t pay any contributions tax.

See the ATO website for more information about how much tax you’ll pay on super contributions.

Smart tip: To avoid paying extra tax on your super, make sure you give your super fund your Tax File Number.

How super investment earnings are taxed

Earnings on investments within your super fund are taxed at 15%. This includes interest and dividends, less any tax deductions or credits.

How super withdrawals are taxed

The amount of tax you pay depends on whether you withdraw your super as:

• a super income stream, or

• a lump sum

Everyone’s financial situation is unique, especially when it comes to tax. Make an informed decision. We recommend speaking to us before you decide to withdraw your super.

Super income stream

A super income stream is when you withdraw your money as small regular payments over a long period of time.

If you’re aged 60 or over, this income is usually tax-free.

If you’re under 60, you may pay tax on your super income stream.

Lump sum withdrawals

If you’re aged 60 or over and withdraw a lump sum:

• You don’t pay any tax when you withdraw from a taxed super fund.

• You may pay tax if you withdraw from an untaxed super fund, such as a public sector fund.

If you’re under age 60 and withdraw a lump sum:

• You don’t pay tax if you withdraw up to the ‘low rate cap’, currently $260,000.

• If you withdraw an amount above the low rate cap, you pay 17% tax (including the Medicare levy) or your marginal tax rate, whichever is lower.

If you have not yet reached your preservation age:

• You pay 22% (including the Medicare levy) or your marginal tax rate, whichever is lower.

When someone dies

When someone dies, their super is usually paid to their beneficiary. This is called a super death benefit.

If you’re a beneficiary, the amount of tax you pay on a death benefit depends on:

• the tax-free and taxable components of the super

• whether you’re a dependent for tax purposes

• whether you take the benefit as an income stream or a lump sum

Contact us today if you have any questions.
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/how-super-works/tax-and-super
Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.
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