First home buyer permanent resident: what you can access in Australia

Yes, a first home buyer permanent resident can usually buy property in Australia and may be able to use the same first home buyer support that is open to citizens, depending on the scheme and your circumstances. Permanent residency means you hold a permanent visa, and for most lenders and government programs that puts you on a similar footing to an Australian citizen. The detail matters though, because some programs name citizenship and residency separately, and lenders set their own rules on top of any scheme. This guide walks through what a permanent resident can generally access, what to check before you apply, and where to confirm the current rules.

We have written this for permanent residents and for people moving from a temporary visa toward permanent residency who want to plan ahead. Throughout, we point to the official source for each figure so you can verify it for your own situation.

Can a first home buyer permanent resident buy a home?

In most cases, yes. A permanent resident can apply for a home loan and can be considered for first home buyer programs, although approval always depends on your circumstances and the lender’s criteria. Whether you are weighing up a pr home loan first home plan or you are a non citizen first home buyer on the pathway to permanent residency, the starting point is the same: lenders assess your income, expenses, existing debts and credit history, and government schemes set their own eligibility tests.

What changes for a permanent resident, compared with a citizen, is usually the documentation. You may be asked to show your visa grant, and some lenders apply their own policy to certain visa types or to deposits sourced from overseas. None of this means you cannot buy. It means it is worth checking a lender’s policy early, ideally before you fall in love with a property.

First home buyer support and who may qualify

There are several streams of first home buyer support in Australia. Each has its own rules, and your residency status can affect some of them.

The First Home Owner Grant

State and territory governments run their own First Home Owner Grant programs. In South Australia, for example, the grant is a one-off payment of up to $15,000 for eligible first home owners, intended for people buying or building a new residential property to live in as their principal place of residence.

On residency, the South Australian rules state that at least one of the applicants must be an Australian citizen or have permanent residency in Australia. New Zealand citizens permanently residing in Australia who hold Special Category Visas may also apply. So a permanent resident applying with a partner, or on their own, can generally meet the citizenship and residency test. There is also a live-in rule: all applicants must reside in the home as their principal place of residence for a continuous period of at least 6 months, commencing within 12 months after the transaction completes.

Grant amounts, price caps and rules differ between states and territories, so always confirm the current detail with the revenue office for the state you are buying in.

The First Home Guarantee and low-deposit schemes

The Australian Government runs guarantee schemes that can let eligible first home buyers buy with a smaller deposit and without paying lenders mortgage insurance. These schemes carry their own eligibility tests, including rules about residency, income and property price, and they are administered through a panel of participating lenders. Because the administering body updates the eligibility detail from time to time, the safest move is to check the current rules with the scheme administrator and confirm with your lender whether your visa status qualifies. This is one area where a permanent resident and a citizen are sometimes treated differently, so it is worth asking the question directly. For how a low-deposit purchase works in practice, see Buying with 5 percent deposit.

The First Home Super Saver scheme

The First Home Super Saver scheme, run by the Australian Taxation Office, lets you make voluntary contributions into your super and later release them to put toward a first home. Releasable contributions are subject to limits of $15,000 of contributions made in a single financial year and $50,000 of total contributions made from 1 July 2017. To use the scheme you must meet the eligibility requirements at the time you request a determination, including that you have never held a relevant property interest in Australia. This scheme is built around your tax and super position rather than your citizenship, so a permanent resident contributing to an Australian super fund can generally take part if the other tests are met.

Deposit, LMI and what a smaller deposit means

A large part of first home planning comes down to your deposit. Lenders mortgage insurance, often shortened to LMI, is an insurance that protects a credit provider if a borrower is unable to repay their loan. It protects the lender, not you. LMI is usually a one-off cost charged when the amount you borrow is more than 80% of the value of the property, which means buyers with less than a 20% deposit may have to pay it. For a fuller explanation, see What is lenders mortgage insurance.

That threshold is measured through your loan-to-value ratio, or LVR: the amount of a loan as a percentage of the value of the asset it was used to buy, calculated by dividing the loan amount by the value of the asset. For example, borrowing $450,000 to buy a $600,000 home is an LVR of 75%. The lower your LVR, the less likely you are to pay LMI. This is exactly why the low-deposit guarantee schemes can matter so much: by guaranteeing part of the loan, they can let eligible buyers borrow with a smaller deposit without that LMI cost. Whether you qualify depends on your circumstances and the lender’s criteria. If LVR is new to you, see What is lvr first home buyer.

It helps to model the numbers before you commit. You can estimate your repayments and see how a different deposit changes your LVR with the home loan repayment calculator.

Steps for a permanent resident planning a first home

Talk to the team

Working out which first home buyer support applies to your residency status can take a few phone calls and some careful reading of the rules. If you would like a hand mapping your options, the team at Finance Lab can talk you through what may apply to your circumstances and help you plan your next step.

Frequently asked questions