Smart ways to approach first home buyer support after divorce

What counts as a first home buyer after separation

You may still qualify as a first home buyer under federal and state schemes even after separation, provided you have not previously held a relevant property interest. The definition varies slightly by program and jurisdiction, but the test almost always examines whether you have owned or part-owned residential property in Australia before.

Consider a buyer who jointly owned the family home during a marriage and transferred their interest to their former partner as part of the settlement. That person no longer owns property, but they did hold an ownership interest previously. Under most first home buyer schemes, this prior ownership disqualifies them from accessing grants, stamp duty concessions, or the Australian Government 5% Deposit Scheme. The exception is if you qualify as a single parent or legal guardian under specific programs that allow a 2% deposit, but even then, prior ownership usually bars access to state grants.

If you retained a property interest during the separation, such as continuing to hold an investment property or remaining on title to the former family home, you are not considered a first home buyer. The schemes are designed for people entering home ownership for the first time, not re-entering after a change in circumstances.

Federal schemes available to eligible buyers

The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit, with Housing Australia guaranteeing the difference between the deposit and 20% of the property value. No income caps apply, no annual place limits apply, and no lenders mortgage insurance is payable. Applications are made through a panel of 31 participating lenders, not directly to Housing Australia.

Property price caps vary by city: Sydney $1,500,000, Melbourne $950,000, Brisbane $1,000,000. Regional caps also increased from October 2025. If you qualify as a single parent or legal guardian, you may purchase with a 2% deposit under the same scheme. The single parent definition requires you to have at least one dependent child in your care at least 35% of the time, which can apply in shared custody arrangements.

Help to Buy allows the Australian Government to contribute up to 40% of the purchase price for a new home and up to 30% for an existing home in exchange for a proportional equity stake. A minimum 2% deposit is required, and income limits are $100,000 for individuals or $160,000 for joint applicants or single parents. Property price caps vary by location. Tasmania has opted out, and Western Australia joined in early 2026. You cannot combine Help to Buy with the 5% Deposit Scheme, but you can pair it with most state grants and stamp duty concessions.

State stamp duty and grant differences

Stamp duty concessions and first home owner grants differ significantly by state and can have a material impact on your upfront costs. In New South Wales, a full transfer duty exemption applies on properties up to $800,000, with a sliding concession on properties between $800,000 and $1,000,000. The $10,000 grant applies only to new builds or substantially renovated homes, and only if the purchase cap is $600,000 or the land and build cap is $750,000.

Victoria offers a full stamp duty exemption on properties up to $600,000, with a sliding scale concession from $600,001 to $750,000. The $10,000 first home owner grant applies to new homes valued up to $750,000 but does not apply to established homes. If you are purchasing an off-the-plan property where the contract was signed on or before 31 October 2026, duty is calculated on land value at contract date only, which can deliver significant savings on new strata-titled developments.

Queensland reduced its first home owner grant from $30,000 to $15,000 for new homes valued under $750,000 for contracts signed from 1 July 2026. On established homes, nil transfer duty applies up to $700,000, with a concession up to $800,000. On new builds, a full transfer duty concession applies with no price cap from May 2025.

In South Australia, the first home owner grant of $15,000 for new homes has no property price cap for contracts entered into on or after 6 June 2024. Full transfer duty concessions apply to new homes and vacant land with no price cap, while on established homes, nil duty applies up to $700,000 and a concession up to $800,000.

How shared custody affects single parent eligibility

Eligible single parents or legal guardians can purchase with a 2% deposit under the Australian Government 5% Deposit Scheme. If you share custody of a dependent child and have that child in your care at least 35% of the time, you may qualify. This threshold is measured across a full year and must be evidenced by a parenting plan, family court order, or statutory declaration.

In a scenario where a separated parent has two children under 18 in their care three nights per week under a shared custody arrangement, they meet the 35% threshold and can apply as a single parent under the scheme. This allows them to purchase with a 2% deposit instead of 5%, provided they have never held a relevant property interest before and meet all other eligibility criteria.

The single parent pathway does not change the property price caps or the requirement that the home be your principal place of residence. It only reduces the minimum deposit required. Lenders will still assess your income, liabilities, and expenses in the usual way, including any child support payments you make or receive. The scheme does not exempt you from serviceability testing.

Income and affordability considerations after separation

Your borrowing capacity after separation depends on your individual income, existing debts, ongoing expenses, and any child support or spousal maintenance. Lenders assess your application based on your post-separation financial position, not what you could afford as a couple. If your income has reduced or your expenses have increased due to running a separate household, your borrowing limit may be lower than expected.

Child support received can be included in your income assessment by most lenders, but only if the payments are regular, documented, and likely to continue for at least the next 12 months. Some lenders require evidence such as a child support assessment from Services Australia or a binding financial agreement. Spousal maintenance may also be included, subject to similar documentation and timeframe requirements.

If you are refinancing to buy out your former partner as part of the settlement and then intend to purchase a new home as a first home buyer, the two transactions need to be carefully timed. You cannot claim first home buyer status if you are still on title to the former property at the time you exchange contracts on the new one. Most buyers in this situation complete the buyout first, settle the property division, and then apply for pre-approval on the new purchase once their name has been removed from the previous title.

Combining schemes and structuring your application

You can generally combine state grants and stamp duty concessions with the Australian Government 5% Deposit Scheme, but you cannot combine Help to Buy with the 5% Deposit Scheme. If you are purchasing in a state with a high first home owner grant or substantial stamp duty saving, using the 5% Deposit Scheme alongside those concessions can reduce your upfront costs significantly.

As an example, a single parent purchasing an established home in Queensland at the current median in a regional area might use the 5% Deposit Scheme to avoid lenders mortgage insurance, pay nil stamp duty under the state concession, and retain more of their savings for settlement and moving costs. The federal scheme does not provide a grant, so the state stamp duty saving is the primary upfront benefit in this scenario. If the same buyer were purchasing a new build, the $15,000 state grant would also apply, further reducing the amount of cash required at settlement.

Applications for the 5% Deposit Scheme are made through participating lenders, not directly to Housing Australia. Not all lenders are on the panel, and some lenders may have different credit policies or interest rate pricing. It is worth comparing more than one participating lender before submitting your application, particularly if you have non-standard income or recent credit issues. A broker who works with the panel regularly can identify which lenders are more flexible in assessing separated buyers or those with shared custody arrangements.

Call one of our team or book an appointment at a time that works for you. We work with people re-entering the property market after separation and can help you understand which schemes apply to your situation and how to structure your application to meet lender and program requirements.

Frequently Asked Questions