Calling all first home buyers! The First Home Owner Grant, along with everything else that comes with buying a home, can be highly perplexing. If you feel like the walls are closing in, read on and you will find that with a few smart decisions, you will be on the right path to owning your dream home.
Did you know? Last year, Australia had 110,000 first home buyers. You can be one too, let’s dive in!
The First Home Owner Grant scheme is a lump sum of cash available to first home owners that meet particular eligibility criteria. It is a one-off payment to help first home buyers with the cost of buying a first home or vacant land to build their home on. Enabling them to enter the property market, the FHOG is funded by the Federal Government and managed by the State Government.
Introduced on 1st July 2000, it is a national scheme to offset the effect of GST on first-home ownership. One grant is payable per new home, irrespective of the number of applicants. This grant does not have to be repaid, it is not taxable, but it does not end here.
Your eligibility for the FHOG will depend on what state or territory you want to buy in, how much you are going to spend, and if you own any property already. Each State and Territory has varied conditions, but the common threads across the board are:
There are two basic means to apply for the First Home Owner Grant. First and most common, through your lender. Lenders act as an approved agent on behalf of the state government and will process the payment of your grant with your loan funds. Second, you can apply directly to the State Government body (usually the Revenue Office) that handles the FHOG in your area.
You know it! Though it may not be enough to cover the entire deposit. However, the grant is paid at different times depending on how and when you apply and the kind of property you are buying or building. For this reason, it is advised against using the grant as a deposit. You do not need a deposit to apply for the grant itself.
Different states and territories across Australia offer various concessions for first home owners. The value of the grant changes according to the location and nature of the transaction. For instance, if you were buying a $630,078 house in Canberra, you would save $17,020.32 as first home buyers stamp duty!
Another example; the First Home Owner Grant NSW is valued at $20,000 for first-time buyers who build their first home, or purchase a new home up to $750,000. In many states, you may not be eligible for the First Home Owner Grant if you pay over a certain amount for your first home. Under the First Home Owner Grant NSW, the first home buyers stamp duty is valued at $0 for new or established first homes priced up to $650,000.
Make sure you read up on the particulars specified by each state before applying for your First Home Owner Grant. Happy buying!