First Home Buyer Upfront Costs 2026-27: Stamp Duty, FHOG, Deposit, and LMI Explained

The total upfront cost of buying a first home in Australia in 2026-27 is not just the deposit. It is stamp duty plus the deposit plus conveyancing plus lenders mortgage insurance — minus any First Home Owner Grant or stamp duty concession you receive. For a $650,000 property, the upfront cash required ranges from under $50,000 for a buyer using the federal First Home Guarantee in Queensland to over $130,000 for a buyer taking an 80% loan in Victoria with no concessions. The three biggest variables are which state you buy in (stamp duty concessions differ dramatically), whether you qualify for a government guarantee scheme (the First Home Guarantee cuts deposit requirements from 20% to 5% and eliminates LMI), and whether you purchase a new home or an existing dwelling (several states offer uncapped stamp duty exemptions only on new builds). This article maps every cost component across all eight jurisdictions, with worked examples at $650,000 and $800,000 so you can calculate the real number you need in savings before exchange.

What Makes Up the Total Upfront Cost

The total cash you need at settlement includes four mandatory components and two potential offsets.

The deposit

The deposit is the percentage of the purchase price you put down in cash. Lenders typically require a minimum of 5% for genuine savings under government guarantee schemes, 10% for a standard loan with lenders mortgage insurance, or 20% to avoid LMI entirely. At a $650,000 purchase price, a 20% deposit is $130,000. At 5%, it is $32,500.

The size of your deposit determines whether you pay lenders mortgage insurance and whether you cross APRA's debt-to-income thresholds. A larger deposit reduces the loan amount, which improves both your loan-to-value ratio and your debt-to-income ratio — two variables lenders weigh heavily under APRA's February 2026 DTI cap, which limits high-DTI lending to 20% of each portfolio.

Stamp duty

Stamp duty is a state-level transfer tax based on the purchase price. It is an upfront cost — lenders do not finance it, and you cannot roll it into the loan. The duty varies by state, by whether you are a first home buyer, and by whether the property is new or existing. At $650,000, stamp duty for a non-first-home buyer ranges from approximately $22,000 in Queensland to $34,000 in Victoria.

First-home stamp duty concessions can reduce this to $0 in several states. Queensland exempts new homes with no price cap. South Australia exempts new homes with no cap. The ACT exempts first homes up to $1,020,000. NSW exempts up to $800,000 for all dwelling types. Victoria exempts only up to $600,000 and phases out by $750,000 — above that, the full duty applies regardless of buyer status.

Lenders mortgage insurance (LMI)

LMI is a one-off insurance premium paid by the borrower when the deposit is less than 20% of the purchase price. It protects the lender, not the borrower, but the buyer pays the premium. LMI typically costs between 1% and 3% of the loan amount, depending on the LVR. At a 90% LVR on a $650,000 property (loan of $585,000), LMI can add $8,000–$15,000 to the upfront cost. At 95% LVR, it can exceed $20,000.

The federal First Home Guarantee scheme eliminates LMI entirely for eligible first home buyers, allowing a 5% deposit with no LMI premium. This scheme has annual caps per financial year and per state, and places are limited — checking availability before relying on it is essential.

Conveyancing and incidentals

Conveyancing typically costs $1,500–$3,000, covering the legal transfer of title. Building and pest inspections add $500–$1,000. Loan application fees vary by lender but can range from $0 (waived under promotional offers) to $600. Budgeting $3,000–$5,000 for these combined costs is prudent.

First Home Owner Grant (FHOG)

The FHOG is a cash grant paid directly to the buyer, not a duty offset. It can be used toward the deposit or settlement costs. Grant amounts vary:

• Queensland: $30,000 on new homes under $750,000
• South Australia: up to $15,000 on new homes
• NSW, Victoria, WA, Tasmania: $10,000 on new homes (NSW: ≤$600,000; VIC: ≤$750,000)
• NT: $50,000 HomeGrown Territory Grant on new homes, no price cap
• ACT: No FHOG (abolished July 2019)

The FHOG is typically paid after settlement, so while it improves your overall cash position, it does not reduce the amount you need at exchange.

Worked Example: $650,000 Property in Queensland

The following scenarios illustrate how upfront costs differ depending on whether you are a first home buyer, whether the property is new or existing, and whether you use a guarantee scheme.

Scenario 1: First home buyer, new $650,000 townhouse, using First Home Guarantee

The most favourable entry point in Australia for a first home buyer at this price.

• Stamp duty: $0 (QLD uncapped new-home exemption)
• Deposit at 5%: $32,500
• LMI: $0 (First Home Guarantee)
• FHOG: $30,000 received after settlement
• Conveyancing and incidentals: $3,000
• Total upfront cash at settlement: $35,500
• Net position after FHOG: $5,500

Scenario 2: First home buyer, existing $650,000 apartment, 10% deposit

• Stamp duty: $0 (QLD existing-home full exemption applies up to $700,000)
• Deposit at 10%: $65,000
• LMI: approximately $10,000 (10% deposit, capitalised or upfront)
• FHOG: not applicable (existing home)
• Conveyancing and incidentals: $3,000
• Total upfront cash: approximately $78,000

Scenario 3: Non-first-home buyer, 20% deposit

• Stamp duty: $22,275
• Deposit at 20%: $130,000
• LMI: $0 (80% LVR)
• Conveyancing and incidentals: $3,000
• Total upfront cash: $155,275

The difference between Scenario 1 and Scenario 3 is approximately $150,000 in upfront cash — more than three times the first home buyer's requirement. The stamp duty exemption alone accounts for $22,275 of that difference, the deposit differential for $97,500, and the LMI saving for approximately $10,000.

Worked Example: $650,000 Property in Victoria

Victoria's narrower first-home concessions produce a starker picture.

Scenario 1: First home buyer, new home, using First Home Guarantee

• Stamp duty: At $650,000, the first-home concession in Victoria is phased. The full exemption applies only up to $600,000, with a phase-out to $750,000. The concession fraction is ($750,000 − $650,000) ÷ $150,000 = 0.667. Standard duty is $2,870 + 6% × ($650,000 − $130,000) = $2,870 + $31,200 = $34,070. Duty payable: $34,070 × 0.667 = $22,714.
• Deposit at 5%: $32,500
• LMI: $0 (First Home Guarantee)
• FHOG: $10,000 received after settlement
• Conveyancing and incidentals: $3,000
• Total upfront cash at settlement: $58,214
• Net position after FHOG: $48,214

Scenario 2: First home buyer, existing home, 10% deposit

• Stamp duty: $22,714 (same phase-out formula applies regardless of property type)
• Deposit at 10%: $65,000
• LMI: approximately $10,000
• Conveyancing and incidentals: $3,000
• Total upfront cash: approximately $100,714

Scenario 3: Non-first-home buyer, 20% deposit

• Stamp duty: $34,070
• Deposit at 20%: $130,000
• LMI: $0
• Conveyancing and incidentals: $3,000
• Total upfront cash: $167,070

The first home buyer's advantage in Victoria is more modest than in Queensland — approximately $66,000 versus $120,000 in cash saved at settlement. The narrower stamp duty concession and the phase-out that has already begun at $650,000 mean a Victorian first home buyer pays more in stamp duty than a Queensland non-first-home buyer. This structural gap explains why first home buyer participation rates in Victoria have lagged behind Queensland since the latter's 2025 policy changes.

State-by-State Stamp Duty at $650,000 (Non-First-Home Buyer)

For buyers comparing entry costs across states, the stamp duty component alone varies substantially:

• Queensland: $22,275
• New South Wales: approximately $23,437
• Northern Territory: approximately $24,000
• ACT: approximately $25,000 (owner-occupier scale)
• Tasmania: approximately $24,623
• Western Australia: $24,890
• South Australia: approximately $29,580
• Victoria: $34,070

Victoria's duty is approximately 52% higher than Queensland's at this price point — a differential of nearly $12,000 that is entirely additional cash required at settlement and not financeable.

State-by-State First-Home Stamp Duty at $650,000 (New Home)

The first-home landscape at $650,000 reveals which states have prioritised first-home entry through duty policy:

• Queensland: $0 (uncapped new-home exemption)
• South Australia: $0 (uncapped new-home exemption)
• ACT: $0 (HBCS, no income test)
• New South Wales: $0 (exemption up to $800,000 for all dwelling types)
• Tasmania: $24,623 (established-home exemption expired; no new-home duty relief)
• Western Australia: phased — at $650,000 in metro, the concession fraction is ($700,000 − $650,000) ÷ $200,000 = 0.25. Standard duty: $24,890. Duty payable: $24,890 × 0.25 = $6,223
• Victoria: $22,714 (phase-out at $650,000)
• Northern Territory: approximately $24,000 (HomeGrown grant $50,000 offsets this in net terms but not at settlement)

The gap between the best and worst result at this price point is approximately $25,000 in upfront stamp duty — enough to cover conveyancing, building inspection, loan fees, and several months of mortgage repayments.

How the First Home Guarantee Changes the Equation

The federal First Home Guarantee allows eligible first home buyers to purchase with a 5% deposit and no lenders mortgage insurance. The government guarantees the remaining 15% to the lender, effectively making the loan an 80% LVR from the lender's perspective without requiring the buyer to put down 20%.

At $650,000:

• With First Home Guarantee (5% deposit, no LMI): deposit $32,500
• With 10% deposit (no guarantee): deposit $65,000 + LMI ~$10,000 = $75,000
• With 20% deposit (no LMI): deposit $130,000

The guarantee reduces the upfront deposit requirement by $32,500 to $97,500. Combined with a stamp duty exemption, it can bring the total upfront cash below $40,000 — a number that a dual-income couple saving $2,000 per month can reach in under two years.

The guarantee has annual caps, and places are allocated per state on a first-come basis. The FY2026-27 allocation typically opens on 1 July and can be fully subscribed within months in high-demand states. Confirming availability with a participating lender before committing to a purchase timeline is essential.

Upfront Cost at $800,000: Crossing the Concession Thresholds

At $800,000, several states' first-home concessions begin to phase out or disappear entirely. The total upfront cost jumps sharply.

$800,000 new home, first home buyer, First Home Guarantee (5% deposit, no LMI)

Queensland — Stamp duty: $0 (uncapped new-home exemption). Deposit 5%: $40,000. Conveyancing: $3,000. FHOG: $30,000. Upfront cash at settlement: $43,000. Net after FHOG: $13,000.

South Australia — Stamp duty: $0 (uncapped new-home exemption). Deposit 5%: $40,000. Conveyancing: $3,000. FHOG: $15,000. Upfront cash at settlement: $43,000. Net after FHOG: $28,000.

ACT — Stamp duty: $0 (HBCS below $1.02m). Deposit 5%: $40,000. Conveyancing: $3,000. FHOG: not available. Upfront cash at settlement: $43,000. Net after FHOG: $43,000.

New South Wales — Stamp duty: $0 (full exemption up to $800,000). Deposit 5%: $40,000. Conveyancing: $3,000. FHOG: $10,000. Upfront cash at settlement: $43,000. Net after FHOG: $33,000.

Northern Territory — Stamp duty: approximately $29,000. Deposit 5%: $40,000. Conveyancing: $3,000. HomeGrown Grant: $50,000. Upfront cash at settlement: $72,000. Net after grant: $22,000.

Western Australia — Stamp duty: $32,316 (no first-home concession available at $800,000). Deposit 5%: $40,000. Conveyancing: $3,000. FHOG: $10,000. Upfront cash at settlement: $75,316. Net after FHOG: $65,316.

Tasmania — Stamp duty: $31,185 (exemption expired). Deposit 5%: $40,000. Conveyancing: $3,000. FHOG: $10,000. Upfront cash at settlement: $74,185. Net after FHOG: $64,185.

Victoria — Stamp duty: $43,070 (no first-home concession above $750,000). Deposit 5%: $40,000. Conveyancing: $3,000. FHOG: $10,000. Upfront cash at settlement: $86,070. Net after FHOG: $76,070.

For a buyer without the First Home Guarantee, using a standard 10% deposit with LMI, add approximately $40,000 in additional deposit and LMI to each figure — pushing total upfront costs well above $100,000 in every state and above $130,000 in Victoria.

APRA Serviceability Buffer: The Hidden Cost

APRA's serviceability buffer, confirmed at 3% in May 2026, means lenders assess your repayment capacity at the product rate plus three percentage points. With typical owner-occupier rates near 6%, this means assessment at approximately 9%.

On a $585,000 loan (90% LVR on $650,000), the difference between actual repayments at 6% ($3,508 per month) and assessed repayments at 9% ($4,706 per month) is nearly $1,200 per month. This buffer compresses borrowing capacity by approximately 30% — a borrower who could service a $585,000 loan at 6% may only qualify for approximately $410,000 at the 9% assessment rate.

Every dollar saved on stamp duty and directed into the deposit reduces the loan amount, which in turn improves both the LVR and the DTI ratio. A $22,000 stamp duty saving applied to the deposit on a $650,000 purchase reduces the loan from $585,000 to $563,000 — a $22,000 improvement that can be the difference between passing and failing a serviceability assessment at the margin.

Data Sources and As-At Date

All state stamp duty rates, FHOG amounts, and first-home concession details are sourced from the respective state revenue offices: Revenue NSW, SRO Victoria, Queensland Revenue Office, WA Department of Treasury, RevenueSA, SRO Tasmania, ACT Revenue Office, and NT Territory Revenue Office. APRA buffer and DTI figures are sourced from APRA announcements most recently confirmed in May 2026. The First Home Guarantee parameters are sourced from Housing Australia (NHFIC). Data current as at: July 2026. Confirm all figures with the relevant authorities before committing to a purchase. Stamp duty, grants, and guarantee scheme places are subject to change.

FAQ

Can I use the FHOG as part of my deposit? Yes, the FHOG is a cash payment made directly to you and can be used toward the deposit. However, most states pay the FHOG after settlement, so you typically need the full deposit and stamp duty at exchange. You can bridge this gap with savings and receive the FHOG as a reimbursement.

Does LMI protect me if I default? No. LMI protects the lender against loss if you default and the sale of the property does not cover the loan balance. You pay the premium, but the coverage is for the lender. If you default, the lender may still pursue you for any shortfall.

How do I check if First Home Guarantee places are still available? Places are allocated through participating lenders, not directly by the government. Contacting a lender that participates in the scheme is the most reliable way to confirm availability. Places are limited per financial year and per state, and the FY2026-27 allocation typically opens on 1 July.

Is stamp duty the same for off-the-plan purchases? Generally no. Most states assess off-the-plan purchases at the contract date value, which can be lower than the completed value — particularly for multi-year construction projects. This can reduce stamp duty significantly. Specific rules on construction commencement and the definition of "substantially renovated" differ by state.

Can I avoid stamp duty by buying in a state with a full exemption for first home buyers? Yes, if you are an eligible first home buyer and the property is your principal place of residence. Queensland, South Australia, and the ACT offer full exemptions at most price points, and NSW offers full exemption up to $800,000. You do not need to be a current resident of that state — you only need to intend to live in the property as your principal place of residence. This flexibility means location choice can be a deliberate strategy to reduce upfront costs.

Related Guides on ozLoan

• Australia Stamp Duty Comparison 2026-27: Same $800,000 Home Across All 8 States
• QLD Stamp Duty 2026-27: First Home Buyers Pay $0 on New Homes with No Price Cap
• WA Stamp Duty 2026-27: First Home Buyers Get Full Exemption Up to $500k
• TAS Stamp Duty 2026-27: Established-Home First-Buyer Exemption Expired
• Foreign Buyer Home Loans in Australia 2026-27
• APRA Borrowing Power Rules 2026: Buffer, DTI Limits, and What They Mean

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This article provides general information only and does not constitute financial, legal, or tax advice. Stamp duty rates, FHOG amounts, guarantee scheme places, and lending policies may change. Confirm your specific situation with the relevant state revenue office, a participating lender, or a qualified conveyancer before committing to a purchase.