First Home Guarantee: When Your Partner Has Owned Property Before

By Andrew Paterson

The First Home Guarantee looks straightforward enough. Buy with 5% deposit, skip the Lenders Mortgage Insurance, save yourself $15,000 to $30,000. But there’s a rule that catches couples every week: both applicants must independently qualify as first home buyers.

If your partner owned property in a previous relationship – even eight years ago – you can’t apply together. The same applies if they were briefly added to a parent’s title, inherited something and sold it quickly, or owned an investment property before you met.

Your options narrow to one: applying solo. One income. One name on the loan. And that changes everything about what you can afford.

This is one of the most common situations we see at Aussiewide, and it’s more nuanced than most online summaries suggest. Let’s work through exactly what counts as “owning property,” how the 10-year rule actually works, and whether the sole applicant workaround makes sense for your situation.

The rule is stricter than you’d expect

The scheme requires that you haven’t held property “in Australia” in the previous 10 years. But “property” is defined more broadly than most people realise.

What disqualifies you:

• Any freehold interest in real property – houses, apartments, townhouses, vacant land and even commercial property
• Leases exceeding 50 years
• Company title interests (common in older Sydney apartments)
• Holding any share in a property, even 1%
• Being added to a parent’s property title for estate planning or financing purposes – even if you never lived there or paid anything

What doesn’t disqualify you:

• Property owned more than 10 years ago – you’re treated as a “returning buyer” and can use the scheme again
• Property owned overseas – the scheme specifically references Australian property only
• Being a passive beneficiary of a family trust that owns property (you don’t hold direct title) – though if you’re a trustee, that’s different and worth getting specific advice

The overseas property point surprises a lot of people. If your partner owned a flat in London for 15 years before migrating to Australia, they’re still considered a first home buyer under this scheme. That’s not the case with some state grants, so it’s worth clarifying.

The 10-year clock: when does it actually start?

The 10-year window is calculated backward from your “Home Loan Date” – the day you sign your loan agreement with the lender. Not when you make an offer. Not settlement. The day you sign.

This creates some planning opportunities. Say your partner sold their last property in March 2016. They’d become eligible again for any Home Loan Date after March 2026. If you’re getting close to that 10-year mark, timing your purchase could be the difference between qualifying and not.

The clock starts when you disposed of your interest – typically the settlement date of the sale, or the date title transferred if it was an inheritance you passed on.

Inherited property: the scenario people forget to mention

Inherited property is one of the trickiest areas. If your partner legally inherited Australian property – even if they sold it within a month – they held a freehold interest. That starts the 10-year clock.

Clients often don’t think to mention a deceased estate handled years ago because they never “bought” anything. But the scheme doesn’t distinguish between property you purchased and property you inherited. Ownership is ownership.

If your partner’s grandmother passed away in 2019 and they briefly held her house before it was sold as part of the estate, that counts. They wouldn’t be eligible for a joint application until 2029.

The “briefly on title” trap

This one catches people who never intended to own property at all.

Common scenarios we see: parents added a child to their property title to help with refinancing, or for estate planning purposes. The child never lived there, never paid anything, and completely forgot about it. But legally, they held a freehold interest in Australian property.

If that happened within the last 10 years, it disqualifies them from the First Home Guarantee. The intention doesn’t matter – only the fact of ownership.

If you’re not sure whether you were ever on someone else’s title, it’s worth checking before you assume you qualify. A title search through the relevant state land registry can confirm your ownership history.

What happens when only one partner qualifies

Here’s where couples face a genuine trade-off.

If your partner owned property within the last 10 years and you haven’t, you can’t apply jointly. But you can apply as a sole applicant – one name on the loan, using only your income for serviceability.

The upside: you access the scheme, avoid LMI, and only need a 5% deposit.

The downside: your borrowing power drops significantly. Lenders assess what you can afford based on your income alone. They can’t consider your partner’s earnings, even if you’re planning to pay the mortgage together.

Let’s put some numbers on this.

A couple with a combined income of $180,000 might borrow around $850,000 to $900,000 together (depending on debts and expenses). Take that down to a single income of $100,000, and you’re looking at roughly $550,000 to $600,000 – sometimes less.

In Geelong, that’s the difference between a three-bedroom house in Belmont and a unit in Corio. It’s a significant constraint.

Use our borrowing power calculator to see what this looks like with your actual numbers. The gap between dual income and single income borrowing can be confronting.

Can your partner still go on the property title?

This is where it gets complicated, and the answer varies by lender.

Generally, lenders prefer everyone on the title to also be on the loan – it’s simpler for their risk management. Having one person on the loan and two people on the title creates a “non-borrower mortgagor” situation, which some lenders won’t do at all and others handle with specific conditions.

If this is your situation, you’ll need a lender who accommodates it. Not all participating lenders offer the same flexibility. This is one of those areas where working with a broker makes a practical difference – we know which lenders will work with split title/loan arrangements and which won’t.

There are also stamp duty implications. In Victoria, if the eligible buyer acquires at least 50% of the property and you’re married or in a de facto relationship, your partner (the ineligible co-buyer) may still benefit from stamp duty concessions on their portion. The rules are nuanced, so it’s worth confirming with your conveyancer.

The numbers question: is the scheme worth it with reduced borrowing power?

This is the real calculation couples need to make, and there’s no universal answer.

Scenario A: Using the scheme as a sole applicant

You borrow $580,000 with a 5% deposit ($29,000). No LMI – saving you roughly $18,000 to $22,000. But you’re limited to properties around $610,000.

Scenario B: Applying together without the scheme

You borrow $800,000 as a couple with a 10% deposit ($80,000). You pay LMI – somewhere between $15,000 and $25,000 depending on the lender and LVR. But you can buy an $850,000+ property.

The LMI cost in Scenario B might be comparable to the savings in Scenario A. But you end up with a more expensive property, likely in a better location, with both names on the loan from day one.

For some couples, accessing the scheme with reduced borrowing power still makes sense – particularly if you have limited deposit savings and are comfortable with a smaller property. For others, paying LMI and borrowing more together is the better path.

There’s no right answer. It depends on your deposit, your target price range, how quickly you want to buy, and whether you’re willing to start with something smaller and upgrade later.

A word on de facto relationships and the declaration

The scheme requires you to declare whether you have a spouse or de facto partner. A de facto partner is someone you’re “living with on a genuine domestic basis, as a couple” – there’s no minimum duration requirement like there is for Partner Visa applications.

If you’re living with your partner but planning to apply as a “single” applicant to access the scheme, that’s not how it works. The Home Buyer Declaration is a Commonwealth Statutory Declaration – making false statements carries penalties of up to four years imprisonment. Lenders verify the information you provide.

If you genuinely live separately and aren’t in a de facto relationship, that’s a different situation. But if you’re a couple sharing a home and bills, you need to declare it – and if your partner has owned property in the last 10 years, you can’t use the scheme as a joint application.

Mixed citizenship couples: another hard stop

If one of you is an Australian citizen or permanent resident and the other is on a temporary visa, you can’t apply jointly. Both applicants must hold citizenship or permanent residency at the Home Loan Date.

The citizen or PR holder could theoretically apply alone, but you’re back to single-income borrowing power. And the visa-holding partner being on the title (but not the loan) adds another layer of lender-specific policy to navigate.

This is one of those situations where waiting for the temporary visa holder to get PR might be the more practical path – depending on your timeline and how close you are to visa approval.

What if you don’t qualify for the First Home Guarantee?

The scheme isn’t the only option. If the partner ownership issue disqualifies you, consider:

• Guarantor loan – If a family member is willing to use equity in their property as additional security, you can potentially borrow more with a smaller deposit without using the government scheme. This lets you apply jointly with both incomes.
• Help to Buy – The federal shared equity scheme has different eligibility rules. It allows previous property owners (as long as you don’t currently own property), so the 10-year rule doesn’t apply. The trade-off is that the government owns a share of your property.
• Save a larger deposit – Not exciting, but getting to 10% significantly reduces LMI costs. At 20%, you avoid LMI entirely. And you can apply jointly with both incomes from day one.
• Pay the LMI – Sometimes the straightforward path is the right one. LMI costs money, but it lets you buy sooner with dual income. Some lenders offer LMI discounts for certain professions (doctors, lawyers, accountants, engineers), which can offset part of the cost.
• Wait for the 10-year window – If your partner is approaching the 10-year mark since they last owned property, it might make sense to wait a few months rather than rush into a compromised purchase now.

Talk to someone who deals with this every week

The partner ownership situation is genuinely complicated, and the right answer depends entirely on your circumstances. What’s your combined income versus individual income? How much deposit do you have? What price range are you targeting? How close is your partner to the 10-year threshold?

A 15-minute chat with one of our brokers will tell you exactly where you stand.

We’ll cover:

• Whether you actually qualify (including the edge cases)
• What the scheme means for your specific numbers
• How much you could realistically borrow as a sole applicant versus jointly
• Which participating lenders suit your situation
• What alternatives make sense if the scheme doesn’t work

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

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

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Last updated: January 2026. The First Home Guarantee changed significantly in October 2025. Income caps and place limits were removed, and property price caps increased to $950,000 for Melbourne and Geelong. However, the eligibility rules around property ownership history remain unchanged.