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Can I stack the 5% scheme, the stamp duty exemption and the government grant?

Bayley Clarke · Mortgage broker on the road · Last checked 16 October 2026 · 5 min read

The 60 second version, filmed from the driver's seat. The rest of this page is the detail underneath it.

The three pieces and what each one needs

There are three separate benefits here, from different places, each with its own rules. The 5% scheme is the federal Home Guarantee Scheme, which lets you buy with a 5% deposit without lenders mortgage insurance. The stamp duty exemption comes from the state. The first home owner grant is also run by the state, and it's generally only for brand new homes.

That last one is what shapes the whole plan. If you want the grant, you're buying a brand new place or building one. An established home can still get you the scheme and the stamp duty exemption, but not the grant. So if you want all three, you're generally looking at a new build, and a build under the scheme has its own set of rules.

The rule that trips people up on a build

For the 5% scheme when you're building, the land purchase and the construction need to be done at the same time. You cannot buy the land, own the land, and then build later. It needs to go to the bank as one application covering both, which generally means both contracts are signed before approval.

So the way to do it is to get your land and your construction contract all ready to go before you apply. If you've already bought the block and want to build on it under the scheme later, the two biggest scheme lenders exclude that outright, and so does at least one smaller one. Land you already own is generally the end of the road for the scheme on that build.

Where the banks actually split on this

Fewer scheme lenders do construction than most people assume. Several lenders that are on the scheme don't offer construction under it at all, so being a scheme lender and doing a scheme build are two different things. Of the ones that do it, most will go to the scheme's full 95%, but one caps a construction loan at 90% before fees, which means a bigger deposit than you planned for.

The builder rules are close to universal. Owner builders are out everywhere, and the lenders that document it want a licensed, insured builder at arm's length, generally on a fixed price contract. Some also rule out kit homes, cost-plus and split contracts. If you're thinking of managing the build yourself, the scheme isn't the path.

The good news is on repayments. The lenders that do scheme construction generally allow interest only during the build, so you're not paying principal on a house you can't live in yet. Some also want a buffer held back in savings for variations, anywhere from 5% to 10% of the build, so budget for that before you sign.

How it all comes together

Once the land and build go in together, the 5% scheme sits on your loan with the bank. The grant is done separately, either lodged by the lender on your behalf or through the state, usually with your solicitor or conveyancer involved. That money comes into the mix too and goes towards the build. Then your stamp duty is sorted, and if you're eligible, that's all done. There are a lot of rules, but generally, yes, you can stack them.