Rentvesting and first home buyer grants: what you give up

One of the least discussed costs of rentvesting is what first home buyers give up. Governments offer first home buyers a lot of help, but almost all of it is for people buying a home to live in. Buying an investment first usually means walking away from some of it, at least for now.

This page lists what’s commonly affected, as at 6 November 2026. Rules change and vary by state, so the official sources linked here are the place to confirm.

The main first home buyer benefits

First home owner grants (FHOG)

Each state and territory runs its own grant. Common features:

• Usually for new homes only.
• Usually a price cap.
• A requirement to live in the home for a minimum period, often starting within 12 months of settlement.

Because of the residence requirement, the grant generally isn’t available on an investment purchase. Some states also treat you as no longer a first home owner once you’ve owned residential property, which can affect grants later.

Stamp duty exemptions and concessions

Most states offer first home buyers an exemption or a reduction in stamp duty below certain price thresholds. These almost always require you to live in the home. On an investment purchase, full stamp duty generally applies, although on split land and build contracts it’s charged on the land component in many states.

The 5% Deposit Scheme

The Australian Government 5% Deposit Scheme (expanded from 1 October 2025) lets eligible buyers purchase with a 5% deposit without paying LMI, with the government guaranteeing part of the loan. Key points (firsthomebuyers.gov.au):

• Owner-occupiers only. Investment properties aren’t eligible.
• For first home buyers, or people who haven’t owned property in Australia in the previous 10 years.
• Applications go through participating lenders.

That second point is the one rentvestors miss. Buying an investment property generally means you’ve owned property, which can remove eligibility for up to 10 years.

What rentvesting typically gives up

Benefit	On the investment purchase	On a later home purchase
First home owner grant	Generally not available	May be affected, depending on state rules
Stamp duty concession	Generally not available	May be affected, depending on state rules
5% Deposit Scheme	Not available (owner-occupier only)	Generally unavailable for up to 10 years after owning property
Main residence CGT exemption	Doesn’t apply to an investment	Applies to the home you later live in

How people weigh it up

The value of what you give up isn’t the same for everyone. It depends on:

• Your state. Grants and concessions differ widely.
• Your price range. Concessions often phase out above a threshold, and many buyers in expensive cities are already above it.
• How soon you’d buy a home otherwise. If buying a home to live in is many years away, the benefit is further off and the rules may have changed by then.
• Whether you’d use the 5% Deposit Scheme. For some buyers it’s the main way in. For others, it isn’t relevant.

Some people decide the benefits are too valuable to give up and buy a home first. Others decide that the home they’d qualify for isn’t where they want to live, and rentvest instead. Neither choice is right for everyone. It depends on your circumstances.

Questions to check before deciding

• What grant and stamp duty concession would I be eligible for in my state, at my price range, as an owner-occupier?
• Would owning an investment change my first home buyer status under my state’s rules?
• Would I use the 5% Deposit Scheme, and how would the 10-year rule affect me?
• What would the investment need to do to make up for what I give up?

Official sources: firsthomebuyers.gov.au for the 5% Deposit Scheme, and your state or territory revenue office for grants and stamp duty.

See the trade-off explained

To hear how first home buyer benefits compare with rentvesting, with examples, join a free WPF GO webinar with Peter Khoury. General information only, not personal advice.