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Do I have to live in my first home, or can I rent it out?
Bayley Clarke · Mortgage broker on the road · Last checked 16 October 2026 · 4 min read
The short answer
It depends what grants and schemes you're claiming. The stamp duty exemption and the 5% scheme are two separate things with two separate rules, and you need to meet both.
The stamp duty exemption generally needs you to move in and live there for a minimum period before you move out. The 5% scheme is stricter: while you're in it, you can't put tenants in at all, and you only come out once your loan is 80% of the property's value.
The 60 second version, filmed from the driver's seat. The rest of this page is the detail underneath it.
Rule one: the stamp duty exemption
First home buyer stamp duty exemptions come from the state. In exchange for not paying the duty, you agree to move into the property as your home and live there for a set period. Move out early and rent it out, and you can be asked to pay the stamp duty back.
So if your plan is to buy, live there for a while, then turn it into an investment, the stamp duty side is generally fine as long as you meet the residence period. That money stays yours. The detail of how long and how soon you have to move in is set by your state, so check it before you sign anything.
Rule two: the 5% scheme
The 5% scheme has very strict rules. While you're under the scheme, you're not able to put tenants in. You need to keep living in the property as an owner occupier the whole time the government guarantee is on your loan.
You can be taken out of the scheme once your loan is 80% of the value of the property. That's the point where the guarantee has nothing left to do, because you'd have a normal 20% equity position. Until then, it has to stay your home. If you stop living there, the lender may require you to pay lenders mortgage insurance or other costs.
This is the bit people mix up. They hear the stamp duty minimum, assume it applies to everything, and put tenants in too early. The scheme's rule is longer and doesn't have a fixed date. It runs until the numbers say you're out.
How long the scheme rule really takes
Going from a 95% loan to 80% generally takes a few years, through paying the loan down and the property growing in value. For most people, plan on at least a couple of years.
If you get lucky, it could be around the 12 month mark. That's usually someone who bought something that needed a lot of love, did the work themselves, and added real value. We get it revalued, the new valuation shows the loan is at 80% or less, and we can take you out of the scheme. From there, you're free to rent it out. So just be careful, because they are two separate things with two separate rules.
The honest bit: decide the plan before you buy
If there's a real chance you'll want to rent the place out within a year or two, that changes how you should buy it. It might mean the 5% scheme isn't the right fit, or that the property you choose should be one with room to add value.
That's an easy conversation before you buy, and an expensive one after.
Want to map out how long you'd need to stay?
A 30 minute call. We go through which exemptions and schemes you'd be using, the rules attached to each, and roughly how long it might take to get to 80%.
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Next question
Can I rent out the home I bought with the 5% deposit scheme?Not while the guarantee is on your loan. What happens when the bank finds out, the exemptions that exist, and the 80% number that gets you out.
Related answers
The full guide: The First Home Guarantee, explained Is it worth living in the property first to get the stamp duty exemption? I owned a place many years ago. Do I become a first home buyer again? Do first home buyers still pay stamp duty?Not your question? Book a call and ask it, or call 0437 189 939.