Finding a home and meeting all the complexities throughout is already a major concern. At this point, receiving government assistance feels like a significant source of support. The First Home Buyers Grant Victoria (FHBG) is one such initiative that provides extensive financial support to first-home buyers. This grant allows first-home buyers to attain certain relief from upfront costs such as stamp duty.
But how does this grant work, what are the eligibility criteria, and how much will you get? Find all these answers in this blog.
Functioning of the First Home Buyers Grant Victoria
Basically, the first-home buyers grant is the government’s way to improve the housing problem faced by first-home buyers. Eligible first-home buyers can receive a one-time grant of $10k under this. It’s a one-time grant offered by the Victorian government to ensure that they can buy their first home affordably.
However, the grant only applies when you buy/build:
- A newly built home
- Townhouse
- Apartment
- Units
- Vacant land
Meanwhile, FHBG works in two categories:
Standard First-Home Owner Grant: Under this, the eligible first-home buyers will receive a $10k grant with other exemptions and concessions.
Regional First-Home Owner Grant: If you purchase your first home in a regional area for up to $750k, you will receive a $20k grant.
Eligibility Criteria for FHBG Victoria
To fully enjoy all the benefits, you must comply with the following criteria:
- The purchased home should be your first home.
- The intention should be to live and not to invest.
- You must be 18 years of age or older.
- The individual should have Australian citizenship or be an Australian citizen.
- No previous property ownership should be there, whether individually or jointly with a partner.
- The home must be your primary residence for at least 12 months.
- The buying contract must take place on or after 1 July 2017.
In addition to the above, you must make sure that the property purchase value does not exceed $750k. As per this, if your home purchase value is $600k to $750k, then you can apply for the stamp duty exemption too. That means, along with the FHBG grant, the first-home buyers will also get the benefits of stamp duty exemptions and concessions.
Available Stamp Duty Exemptions and Concessions Under the First Home Buyer Grant Victoria
You can get stamp duty discounts, exemptions, and waivers to save money when purchasing the following items:
- Purchases of new Victorian residential properties worth $1 million were made between 25th November 2020 and 1 July 2021.
- Residential property purchases located within the City of Melbourne are valued at $1 million.
- New residential properties get a 50% duty concession.
- Unsold properties for 12+ months receive a full exemption.
- Property purchases of up to $550k that are purchased as your intended primary residence.
Process to Apply for The First Home Buyer Grant Victoria
Since you know about the eligibility and First Home Buyer grant benefits, you can apply for the FHBG Victoria following the steps below:
Step 1: Confirm Eligibility
Firstly, confirm all the eligibility in terms of individual requirements and property requirements.
Step 2: Prepare supportive documents
- Identify proofs, including an Australian birth certificate, a passport, and citizenship.
- A driving license confirming a person’s identity
- If purchasing with a spouse/co-partner, provide medicare card, motor vehicle registration notice, and Centrelink/Department of Veterans’ Affairs card.
- A copy of the marriage/divorce certificate, if applicable.
- Death certificate in case of the widow
- The document that indicates the details of separation, if applicable, should be provided.
Step 3: Complete & lodge the application
In this step, file your application either through an approved agent or through the SRO Victoria online portal. However, make sure to lodge it within 12 months of the settlement or completion of the home’s construction. The application must also be completed truthfully, with no important information omitted.
Step 4: Wait for Assessment and Grant
After lodgement, wait for the assessment by your lender or the SRO. Once approved, you will receive a grant either at settlement or at the first progress payment.
Possible Risks With First Home Buyer Grant Victoria
Although the FHBG grant is a supportive initiative, it comes with certain possible risks:
Limited Coverage: You can only apply for this grant for new homes and not for established homes.
Live-in Criteria: The grant cannot be used for investment purposes. If you don’t live there for at least 12 months, you may be asked to repay the grant.
Fixed Grant Value: $10k may not be enough to cover all upfront costs. Many buyers can still find it challenging to manage costs such as stamp duty, deposits, and legal fees.
Strict Eligibility Rules: If you or your partner have ever owned property, even overseas, you may be disqualified.
Disqualifying from Future Benefits: Using the FHBG now means you won’t be eligible again later. Make sure the moment is the right time for you to buy.
Tied to Strict Timelines: You must apply within 12 months of settlement or build completion. Missing the deadline means missing the grant.
Now, are there other initiatives or options you can apply for?
Other Options/Initiatives for First Home Buyers in Victoria
Other options and initiatives in which the first home buyers can get some relief in Victoria include
Victorian Homebuyer Fund (Shared Equity Scheme)
It is a government scheme to improve homeownership for eligible first-home buyers. Under this, first-home buyers only need a 5% deposit (or 3.5% for Aboriginal and Torres Strait Islander applicants).
Additionally, the Victorian Government funds up to 25% of a home’s price, or 35% for Aboriginal and Torres Strait Islander buyers, for shared ownership. As a result, you can save more money from this initiative.
First Home Super Saver Scheme (FHSSS)
This is another government initiative called the First Home Super Saver Scheme, which allows first-home buyers to leverage their superannuation. But the only requirement is that they need to add $15k extra to it.
With this, they can withdraw up to $50k, subject to eligibility criteria and subsequent tax benefits.
Help to Buy Scheme
First-home buyers under this Help to buy scheme obtain a loan with at least a 2% deposit. This is because of the government equity contribution of up to 30% for an existing home and 40% for a new home.
Thus, with this, the eligible first-home buyers can further reduce their mortgage size and ongoing repayments with more savings.
First Home Buyer Guarantee Scheme
With this, the first home buyer can take a home loan of up to 15% of the property value with only a 5% deposit with no LMI. However, they must live in the purchased property and meet income and property price thresholds.
Summary
Therefore, the First Home Buyer Grant in Victoria is a beneficial step toward homeownership for eligible first-time buyers. While it offers up to $10k for new homes (or $20k in regional areas), it has risks too. For example, there are strict eligibility criteria, limited coverage, and the possibility of disqualification from future benefits.
In addition, the application process is thorough, which makes it even more challenging for first-time homebuyers. So, first-home buyers can apply for other schemes too, such as the Help to Buy scheme, FHSSS, and the Victorian homebuyer fund.
For more information/guidance on the First Home Buyer Grant Victoria, consult Nfinity Financials or speak with our mortgage experts at 1300 GET LOAN, 0456 456 267.
FAQs
What is the First Home Buyer Grant (FHBG) in Victoria?
The program offers a one-time $10,000 grant for eligible first-home buyers who are purchasing or building a new home in Victoria.
Who can apply for the FHBG in Victoria?
Australian citizens or permanent residents over 18 buying their first new home to live in, not invest, can apply.
Does FHBG apply to established homes?
No, the grant is only available for new homes, townhouses, apartments, units, or homes built on vacant land.
Is there a price cap on the property?
Yes, your property must be valued at $750,000 or less to qualify for the FHBG in Victoria.
Can I use FHBG with other schemes?
Yes, you may combine it with stamp duty concessions, the First Home Guarantee, or the Victorian Homebuyer Fund.
