- 5 Jul, 2017

FHOG: Everything You Need to Know

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First introduced to Australia in 2000, the First Home Owner Grant (FHOG) has repeatedly changed. While nationally recognised, each territory and state fund their own FHOG. As a result, tweaking of FHOG rules occurs yearly, depending on budgets. So, let’s look at these now.

Rules Change Continually

Since the introduction of the FHOG in 2000, state and territory governments have altered the scheme significantly. Changes include the amount available to first home buyers, the property type eligible and the capped home value limit.

When first introduced, the FHOG was available for new and established homes. Plus, its value was initially $7,000. There was also no income test or upper limit on the purchase price of a home.

After its introduction, the FHOG received a boost on two occasions – in 2008 and 2012. These boosts were in response to changing economic conditions.

Today, rural home buyers can receive added funding, depending on their location. In addition, some states offer stamp duty reductions or exemptions. To find out if you’re eligible, please refer to the links at the bottom of this article.

Grants Are Territory and State Managed

State and territory governments usually announce their FHOG terms and conditions, and funding levels in their budget. Often, budget announcements occur annually, just after the end of the financial year, for the preceding year ahead. At this time, cap limits can change where home and land packages cannot exceed a specified dollar amount.

Payment Times Vary

Furthermore, each state and territory have rules as to what buildings are FHOG eligible, and the timing of payment. Therefore, it’s important to check out their websites. But, as a rule of thumb, payment of the grant is under the following conditions:

  • Established property for renovation – Payment is at the time of settlement.
  • Building contract – Funded at the time of the first progress payment.
  • Owner builder – Disbursed on receipt of the Certificate of Occupancy.
  • New home – Remunerated at settlement.
  • Off-the-plan purchase – Paid at the time of settlement.

Grant Conditions Differ

Depending on the territory or state of the home purchase, the FHOG conditions for eligibility will differ. Generally, the following rulings apply:

  • You must be a first home buyer to apply.
  • If you’re applying with a partner or spouse, then they must also be a first home buyer.
  • Receiving the grant occurs only once.
  • Only Australia citizens can apply.
  • Natural people can apply, not a company or trust.
  • Grant applicants must live in the home for at least six months after completion.
  • Applicants must be 18-years-old and over.
  • New builds or substantially renovated homes are eligible.
  • Maximum property values, depending on the state or territory are between $575,000 and $750,000.

FHOG Links

Additionally, each territory and state government have a link to their FHOG, as listed below. However, you can also visit the Federal Government site to obtain more information.

Are you seeking to buy your first home? Then contact eChoice. Our brokers help you understand the FHOG and assist with your application. Plus, they have access to 100s of mortgage products. So, we’ll find you an affordable mortgage.

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