Buying your first home is undoubtedly one of the most exciting milestones in anyone’s life – but it also happens to be one of the most expensive! Besides getting together the finances to put down a deposit, there are a plethora of other costs involved in the property sale process, from the conveyancing fees to paying stamp duty. Thankfully, there’s a government incentive designed to ease the financial burden on prospective Victorian homeowners – the First Home Owner Grant VIC.
The First Home Owner Grant (FHOG) initiative was introduced by the Australian government on 1 July 2000 to offset the effect of the GST on home ownership. This scheme is available Australia-wide, but not all grants are created equal.
Each state has its own legislation and guidelines under which the FHOG operates. So, if you’re looking to purchase your first home in Victoria, it’s wise to first familiarise yourself with the requirements to ensure you’re eligible. Read on for our in-depth guide to the First Home Owner Grant in VIC.
What is the First Home Owner Grant VIC?
The First Home Owner Grant VIC is a Victorian State Government initiative designed to make it easier for first-time buyers to purchase a home. It is a one-off, lump payment paid by the Victorian government to eligible individuals, couples and families.
Is the First Home Owner Grant still available in Victoria?
Yes, the First Home Owner Grant has been available in Victoria since it was rolled out nation-wide in 2000. However, like the grants in other states, the FHOG has undergone significant changes over the years due to the changing state budget and economic landscape.
For example, to acknowledge the difficulties breaking into certain property markets, the grants for both Melbourne and regional Victoria were increased in 2017. So, it’s important to ensure you’re up to date with the most current guidelines when you’re applying for the FHOG – to determine how much you’ll save and check whether you’re eligible.
How much is the First Home Owner Grant VIC?
In Victoria, first-time home buyers purchasing properties valued up to $750,000 are eligible for a $10,000 grant. An additional $10,000 (equalling a grand total of $20,000) is available to people looking to buy homes up to $750,000 in regional Victoria, for leases signed between 1 July 2017 and 30 June 2020. This applies to brand new or off-the-plan homes and can include a house, apartment, townhouse, unit or even a van in a fixed location.
As of 2017, both new and established homebuyers in Victoria are also eligible for stamp duty exemptions or concessions. If you’re buying a property valued up to $600,000 as an owner-occupier, you no longer have to pay stamp duty, and if your home is valued between $600,001 to $750,000, you’re given a discount on a sliding scale.
- Off-the-plan concession: applicable for an off-the-plan property, this concession is available on house and land packages or for refurbished homes;
- Pensioner concession: a one-off concession for pension card holders who are buying property up to the value of $750,000. The full concession applies to homes up to $330,000, and a part concession applies to property valued between $330,000 and $750,000;
- The young farmer concession: Farmers aged under 35-years buying a single parcel of land may be exempt from paying duty on the first $300,000 providing the farm is valued at less than $600,000. Farmland valued between $600,000 and $750,000 may also be eligible to receive a duty concession.
What are the eligibility requirements of the First Home Owner Grant VIC?
You may be wondering ‘am I eligible for the First Home Grant in Victoria?’ There are some eligibility criteria you must satisfy in order to successfully apply for the FHOG, many of which are specific to Victoria. These include:
- You must be over the age of 18;
- You must be a citizen or resident of Australia, either by the time of settlement (if you’re buying a home) or by the date the property is ready to move into (if you are building the property);
- You must intend to live in the home as a primary place of residence for at least 12 consecutive months, starting within the 12 months after settlement or completion of construction. However, as of 27 June 2017, Australian Defence Force staff (including Australian Army, Air Force or Navy) are exempt from this requirement if they are on duty or leave;
- Your property cannot be an investment property or a holiday house;
- Your home cannot exceed the value of $750,000, regardless of whether you’re buying in a metropolitan or regional area;
- Neither you nor your spouse can have previously received a first home owner grant in Australia or purchased a home in Australia before 1 June 2000. This applies regardless of whether or not you and your spouse are purchasing the property together. However, you may still be eligible for the FHOG if you – or your partner – did not live in the home you previously purchased, as it would not be considered a residential home;
- The home must be a new or substantially renovated property. A ‘new’ home as stated by on the Victorian State Revenue Office website is defined as:
- A newly built home;
- An existing property which is being sold for the first time as a new premises property;
- A land and building package or;
- Vacant land on which you will build a new home.
How to apply for the First Home Owner Grant VIC
When it comes to claiming the First Home Owner Grant VIC, you have two choices. If you have completed construction or have already settled on your property, you can choose to submit your application directly through the State Revenue Office (SRO) yourself.
However, the application process can be quite complex and time-consuming, so the safer option is to have an approved agent submit it on your behalf. Generally, if you are also applying for a loan, your bank will normally organise and process the FHOG for you. However, you may also want to consider working with a broker to ensure your application goes
How you file your First Home Owner Grant application and whether you’re buying or building can affect when you receive the payment.
If you have applied through an approved agent, payment can be made through them at the time of your settlement.
If you have a contract to build, your approved agent will process payment at the date of the first progressive payment, or the State Revenue Office will pay into your nominated account within two weeks of your application, which will only be considered after the Certificate of Occupancy is issued.
If you are an owner builder, the approved agent will pay after receiving your Certificate of Occupancy, or the SRO will pay into your nominated account within two weeks of filing your application, which will only
If you have a terms contract, the SRO will pay into your nominated account within two weeks of filing your application, but will only be considered after providing proof of possession.
If you have applied directly through the SRO, payment will be made to your nominated account within two weeks of your application, which can only be considered after settlement.
Regardless of whether you are submitting the application directly or going through an approved agent, you will want to ensure you have all the necessary supporting documents at hand. These may include:
- Australian birth certificate or citizenship certificate
- Australian drivers licence, passport or proof of age ID card
- Medicare card
- Motor vehicle registration
- Centrelink or Department of Veterans’ Affairs card
- Utility bills for proof of identity and address (ie. electricity, gas, water)
- Rates notice
- Building or contents insurance policy
- Lease agreement
- Taxation assessment notice
- Electoral enrolment card
- Mortgage papers for the property for which you’re claiming the FHOG
- Marriage certificate, if applicable
If you’re not buying a home in Victoria, then you may be eligible for the First Home Buyer Grant in another state. Just remember that all states have different guidelines, so you need to read the legislation before applying for the FHOG.
If you’re looking to buy your first property in Victoria, you may want to consider using one of eChoice’s experienced brokers to assist with your application and make the process as streamlined as possible. Plus, we also have access to hundreds of mortgage products, so we can help you find a competitive deal that best suits your needs.
Buying Your First Home?
Download our 15+ page guide today!
You might also like:
- What do lenders look for in a mortgage applicant?
- What’s the difference between a market and bank valuation?
- Pinterest for property: 5 apps to help you find your dream home