First Home Guarantee After Inheriting Property

By Andrew Paterson

Inheriting property doesn’t automatically disqualify you from the First Home Guarantee. Whether it affects your eligibility comes down to whether the title was ever in your name – and if it was, when it came off.

How inherited property affects eligibility

The scheme requires that you haven’t owned property in Australia in the previous 10 years. And for these purposes, inherited property is treated the same as purchased property. If your name was on the title, you owned it.

It doesn’t matter how long you held it, whether you lived in it or whether you had any say in inheriting it.

The scheme also only looks at Australian property, so inheriting overseas doesn’t affect your eligibility.

The 10-year clock starts from when you came off the title – not from when you inherited. If a property was transferred to you in March 2020 and sold in June 2020, you’d be eligible again from June 2030.

Executor versus beneficiary

• Executor only – If you managed the sale of a property without it ever being transferred to you, you didn’t own property under the scheme. The title stayed in the name of the deceased or the estate throughout.
• Beneficiary – If you inherited jointly with siblings and the title was transferred into all names, all parties are ineligible for 10 years from when the property was sold or transferred.

Some people are both. If you were the executor and beneficiary, it comes down to whether the property was ever registered to you.

If the estate was settled by selling the property directly without transferring title to the beneficiaries first, there’s no ownership issue.

If the property was held in a trust, the rules are different. 

Being a passive beneficiary of a trust that owns property is generally not the same as owning it yourself. But if you were a trustee and held title personally, it may count. Where trusts are involved, it’s worth confirming with the solicitor who set up the structure.

Working out your eligibility date

You need two dates: when your name went on the title and when it came off. Add 10 years to the second date. That’s when you’re eligible.

If you inherited jointly with siblings and the property stayed in everyone’s names until November 2018, all of you become eligible again in November 2028.

If you’re not sure about the exact dates, a title search through Land Use Victoria will show the full ownership history. If a solicitor handled the estate, they can usually confirm how the property was registered.

What your lender will need

If inheritance is part of your ownership history, lenders typically ask for:

• Grant of Probate or Letters of Administration
• Title searches showing when you went on and off the title
• A statutory declaration explaining your role in the estate

This is standard for anyone the lender considers a “returning buyer.”

If there’s any uncertainty about whether you were on the title, it’s worth getting the title search done before you start the application rather than during it.

If one of you inherited property

If one partner inherited property within the last 10 years and the other didn’t, you can’t apply for the scheme jointly.

The alternative is the non-owner applying as a sole applicant – one income, one name on the loan. That changes what you can borrow.

Going from two incomes to one can cut your borrowing power significantly. In Greater Geelong, where median house prices vary widely by suburb – roughly ranging from the mid-$400,000s to the high-$800,000s depending on the suburb, that difference matters.

Use our borrowing power calculator to see the difference between joint and solo borrowing for your situation.

Waiting versus buying without the scheme

If you’re close to the 10-year mark, the decision is often whether to wait or buy without the scheme.

On a $750,000 Geelong property:

• With First Home Guarantee: roughly $60-70k upfront (5% deposit, no LMI)
• Without scheme (10% deposit plus LMI): roughly $110-120k upfront
• Without scheme (20% deposit): roughly $175-185k upfront

That gap takes years to save, during which prices may continue to move. There’s no universal answer. It comes down to timing, savings and comfort with repayments.

If a family member is willing to help, a guarantor loan is worth considering. The price cap doesn’t apply, you don’t need to meet the scheme’s ownership rules and you still avoid LMI.

Victoria’s First Home Owner Grant and stamp duty concessions also have their own ownership criteria that don’t always line up with the federal scheme – our Geelong grants and schemes guide covers how they interact.

Not sure whether you qualify?

The rules are clear once you know the details of your situation – but those details aren’t always obvious until you check the title documentation. We work with Geelong buyers navigating these questions regularly.

A 15-minute conversation will tell you whether you qualify now, when you’ll become eligible if you don’t and what your options look like in the meantime.

No cost, no pressure, no paperwork until you’re ready.

Schedule a free chat or call us on (03) 5222 7453.