Do you know what townhouses cost first home buyers?

Townhouses give first home buyers more space without the full financial weight of a detached home

A townhouse sits between an apartment and a house in both price and structure. You own the dwelling and usually a small courtyard or outdoor area, but share common walls and facilities with neighbours. That middle ground appeals to first home buyers who want more than a two-bedroom unit but cannot stretch to a standalone property in suburbs like Griffith or Kingston.

In the ACT, townhouses are typically unit-titled, which means they fall under the off-the-plan unit duty exemption if purchased before construction is complete. From 1 July 2026, first home buyers in the ACT are exempt from conveyance duty on all owner-occupied purchases regardless of property value or household income. That exemption applies equally to established townhouses and off-the-plan developments. If you are buying an off-the-plan townhouse, the unit duty exemption also applies with no property value cap, provided you occupy the property as your principal place of residence for at least 12 months starting within 12 months of settlement.

The Australian Government 5% Deposit Scheme accepts townhouses across the ACT up to a price cap of $1,000,000. You can purchase with a 5% deposit, and Housing Australia guarantees the gap between your deposit and 20% of the property value. No lenders mortgage insurance is payable. The scheme is available through participating lenders, and loan features such as offset accounts or split rate structures depend on the lender you choose.

How stamp duty exemptions changed for ACT townhouse buyers in July

Before 1 July 2026, the Home Buyer Concession Scheme in the ACT provided a full duty exemption on properties valued up to $1,020,000 for buyers on low to moderate incomes, with a partial concession available up to $1,455,000. That threshold and income test were removed entirely from 1 July 2026. Every first home buyer in the ACT who meets the residency and ownership eligibility criteria now receives full duty exemption, regardless of the purchase price or their household earnings.

Consider a buyer purchasing an established townhouse in Bonython for $650,000. Under the previous rules, they would have qualified for full duty exemption because the property value sat well below the $1,020,000 threshold and their combined income was within the concession limit. Under the current rules, they still receive full duty exemption, but the income cap no longer applies. A different buyer purchasing a three-bedroom townhouse in Coombs for $950,000 would previously have been subject to income testing and potentially ineligible if their combined earnings exceeded the threshold. From 1 July 2026, that same buyer receives full duty exemption without any income assessment.

This change removes one of the key barriers for dual-income households who previously earned too much to qualify for duty relief but not enough to absorb the upfront duty cost comfortably. Townhouses in suburbs like Wright, Denman Prospect, and Whitlam now carry the same duty treatment as apartments or detached homes, provided the buyer meets residency requirements.

Do you need a larger deposit for a townhouse than an apartment?

Not under the Australian Government 5% Deposit Scheme. The scheme accepts apartments, townhouses, and detached homes equally, provided the purchase price sits at or below the applicable cap. In the ACT, that cap is $1,000,000 for all property types. Lenders assess your borrowing capacity based on income, liabilities, and living expenses, not on whether the property shares a wall.

In our experience, buyers sometimes assume townhouses require a 10% or 15% deposit because they are perceived as higher-risk than apartments. That is not the case under the federal scheme. Both the purchase price and the lender's valuation must meet the cap, but the deposit percentage remains 5% regardless of the dwelling type. If you are purchasing with a deposit below 20% outside the government scheme, lenders mortgage insurance applies to all property types, and the premium is calculated on loan-to-value ratio rather than dwelling classification.

Can you use Help to Buy on a townhouse in the ACT?

Yes. Help to Buy operates in the ACT and accepts townhouses, apartments, and detached homes. The Australian Government contributes up to 30% of the purchase price for an existing home or up to 40% for a new home in exchange for an equivalent equity share. You must contribute a minimum 2% deposit. Income caps apply: $100,000 for single applicants and $160,000 for couples or single parents. Property price caps vary by postcode and are confirmed through the Housing Australia postcode search tool.

Help to Buy cannot be combined with the 5% Deposit Scheme, but it can be used alongside the ACT duty exemption. A buyer using Help to Buy on an established townhouse valued at $800,000 would contribute 2% upfront, or $16,000, and the government would contribute up to $240,000. The buyer then services a mortgage on the remaining balance. The government share does not accrue interest, but you are required to share any capital gain or loss when you sell or buy out the government's share.

What happens if the townhouse is part of a new development?

If you are purchasing a townhouse in a new development before it is built or while it is under construction, the off-the-plan unit duty exemption applies. From 1 July 2026, that exemption has no property value threshold in the ACT. You receive full duty exemption provided you occupy the property as your principal place of residence for at least 12 months starting within 12 months of completion.

The distinction between pre-construction and under-construction contracts matters in some states but not in the ACT under current rules. Both categories receive the same treatment. The exemption applies to unit-titled properties, which includes most townhouse developments in suburbs like Coombs, Whitlam, and Denman Prospect. Buyers should confirm the title structure with their conveyancer before exchanging contracts, because the exemption does not extend to community-titled properties in the same way.

If you are using the 5% Deposit Scheme on an off-the-plan townhouse, the lender will require a valuation at or before settlement. The valuation must meet the applicable price cap at that time. If the valuation comes in below the contract price, you may need to contribute additional funds to cover the shortfall or renegotiate with the developer.

How much should you budget beyond the deposit?

Settlement costs on a townhouse in the ACT include conveyancing, building and pest inspections, loan application fees, and any adjustments for rates or body corporate levies. Conveyancing typically runs between $1,200 and $2,000 depending on the complexity of the transaction. Building and pest inspections combined usually sit between $500 and $800. Some lenders charge an application or establishment fee, which can range from nil to $600 depending on the loan product.

If the townhouse is part of a strata scheme, you will also pay quarterly body corporate levies. Those levies cover insurance, maintenance of common areas, and any sinking fund contributions. In newer developments, levies can start low and increase as the building ages or as the sinking fund builds reserves. Buyers should request a copy of the body corporate financial statements and levy history before signing a contract, particularly in developments that include shared facilities such as gyms, pools, or landscaped common areas.

Should you fix part of your loan or keep it fully variable?

That depends on how much certainty you want in your repayments and whether you value access to features like an offset account. Fixed rates lock in your repayment amount for a set period, usually between one and five years. Variable rates move with the market, which means your repayments can go up or down. Variable loans typically offer offset accounts, redraw facilities, and unlimited extra repayments. Fixed loans often restrict those features.

A split loan structure lets you fix part of your balance and keep the rest variable. A buyer with an $800,000 loan might fix $500,000 for three years and leave $300,000 variable with an offset account attached. If they have savings or irregular income, the offset account reduces interest on the variable portion while the fixed portion provides repayment certainty. The structure you choose should reflect your cash flow, savings habits, and how long you plan to hold the property.

If you are comparing home loan options, confirm which features are available on each loan type before you commit. Some lenders allow offset accounts on fixed loans but cap the offset benefit or charge a higher rate. Others do not offer offset on fixed loans at all. Buyers should also understand break costs, which apply if you pay out a fixed loan early. Break costs are calculated based on the difference between your fixed rate and the lender's current funding cost for the remaining fixed term. Those costs can run into thousands of dollars if rates have fallen significantly since you fixed.

Call one of our team or book an appointment at a time that works for you. We work with first home buyers across the ACT and can walk you through pre-approval, deposit structures, and how the duty exemption applies to your specific purchase.

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