Key Takeaways
- The ATO generally processes most electronically lodged tax returns within around 12 business days, though some take longer, which puts a refund in reach not long after EOFY if you lodge early.
- Since 1 October 2025, the Australian Government’s 5% Deposit Scheme has removed income caps and uncapped the number of places, opening it up to far more first home buyers than the old First Home Guarantee.
- A tax refund can genuinely move the needle on a deposit, but many lenders still apply “genuine savings” rules that can affect how a lump sum is treated.
- Combining a refund with a low-deposit government scheme can shrink both the time and the LMI cost of getting into your first home.
Tax time and deposit-saving season overlap more than most first home buyers realise. If you lodge early and get a refund back, it can land at exactly the point where an extra few thousand dollars makes a real difference to your deposit — especially paired with the recent changes to government deposit support.
Here’s how the timing and the schemes actually fit together.
When Your Refund Actually Lands
The Australian financial year runs from 1 July to 30 June, and individual tax returns are generally due by 31 October if you’re lodging yourself. According to the ATO, most returns lodged online are processed within around 12 business days, though some take longer if they’re selected for manual review. Lodging as soon as your income statement is finalised, rather than waiting until October, is the simplest way to get a refund into your deposit savings sooner rather than later.
The 5% Deposit Scheme: What Changed
If you haven’t looked at the Home Guarantee Scheme in a while, it’s worth another look. On 1 October 2025, the government significantly expanded it and it’s now known as the Australian Government 5% Deposit Scheme.
No More Income Caps
The scheme previously capped eligibility at $125,000 for singles and $200,000 for joint applicants. According to Treasury, those income caps have now been removed entirely.
Uncapped Places
The scheme was previously limited to a set number of places each year. Treasury confirms places are now uncapped across all streams, meaning far fewer first home buyers miss out simply because the year’s allocation ran out.
What It Still Does
The scheme still lets eligible first home buyers purchase with as little as a 5% deposit without paying Lenders Mortgage Insurance, with the government guaranteeing the rest of the gap the lender would otherwise require LMI for. Property price caps still apply and vary by location, so check the current cap for your area on the Housing Australia website before assuming a property qualifies, since these figures are set by location and reviewed periodically.
Where a Tax Refund Fits In
A refund isn’t going to fund a deposit on its own for most buyers, but it can be the difference between needing another six months of saving and being ready now. If you’re within reach of a 5% deposit under the scheme, a refund landing at the right time can close that final gap.
Genuine Savings Rules
Here’s the catch worth knowing about before you count on it: many lenders apply “genuine savings” requirements, generally wanting to see deposit funds accumulated or held over a period, often around three months, rather than appearing as one lump sum right before you apply. Policies vary a lot between lenders, and some accept a tax refund as genuine savings without issue, while others want to see it sit in your account for a while first. This is lender policy, not a government rule, so it’s worth checking before you assume your refund will count straight away.
How Loanworx Can Help
We don’t provide tax advice, and your actual refund and eligibility for any government scheme depends on your personal circumstances. What we can help with is checking your eligibility for the current first home buyer options, understanding which lenders will accept your refund as genuine savings right away, and mapping out a timeline so your deposit, your refund and your purchase plans line up.
Frequently Asked Questions
1. How long does it take to get a tax refund after lodging?
The ATO generally processes most electronically lodged returns within around 12 business days, though some returns take longer if selected for review. Lodging as early as possible in the new financial year is the best way to get your refund sooner.
2. Has the First Home Guarantee changed?
Yes. Since 1 October 2025 it has been significantly expanded and is now known as the Australian Government 5% Deposit Scheme, with income caps removed and places uncapped across all streams.
3. Do I still need a 20% deposit to avoid LMI?
Not if you’re eligible under the 5% Deposit Scheme, which allows eligible first home buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance, subject to property price caps for your area.
4. Will my lender count a tax refund as genuine savings straight away?
It depends on the lender. Some accept a lump sum like a tax refund as genuine savings immediately, while others prefer to see funds held for a period, often around three months. Check with your broker before assuming either way.
5. Are there property price limits under the scheme?
Yes, price caps apply and vary by location. Check the current cap for the area you’re buying in on the Housing Australia website before assuming a property is eligible.
This article is general information only and does not take your objectives, financial situation or needs into account, and it is not tax or financial advice. Government scheme eligibility, price caps and lender genuine savings policies vary and change over time. Always confirm current details with the ATO, Housing Australia, or your broker before making a decision.
