The First Home Buyers Grant is a government scheme introduced in 2000 as an effort to offset the Good and Services Tax (GST) paid upon the purchase of a house.
The grant is currently a lump-sum payment to first home buyers who buy or build a new home. Notorious for changing its terms every couple of years, previously the grant was available for established homes too. For these reasons, it’s important to keep up with the latest terms to check if they apply to your purchase.
national scheme is administered separately by the states and territories,
meaning different sums are available in different locations.
Unlike most other parts of the home-buying process, the grant isn’t means tested i.e. based on income, but rather a set sum per state.
Can the first home owners grant be used as a deposit?
Typically, the first home buyers grant is paid at settlement after a deposit has been made. For this reason, it is unlikely this lump sum could be put down in your deposit and you will need to foot the bill of the deposit yourself.
Can permanent residents get the first home owners grant?
Yes – permanent residents of Australia are eligible to receive a first home buyers grant, but it must be the first property you have purchased in Australia.
Am I eligible for the first home owners grant?
The national scheme is administered separately by the states and territories, consequently, the terms and conditions will vary across different locations.
Eligibility is subject to a number of factors including the value of your home and whether you intend to live in your home after construction.
to receive the grant:
you must be an individual, not a company or trust
you must be over 18
you, or at least one person you’re buying with, must be an Australian citizen or permanent resident
you must be buying the property as an individual and not a company or trust
You plan on living in the residence for the minimum amount of time set by your state or territory
You must apply for the grant within 12 months of settlement
The market value of the home must not exceed the limit of your state or territory
Generally, you won’t be eligible for the grant if you or your spouse:
have previously owned or co-owned property in Australia or
have received an Australian first home owners grant
To save yourself time and reliance on the grant, check that you are first eligible for the grant. Details for each State or Territory are listed above. Generally, you will need to be over 18, an Australian citizen or permanent resident and, be purchasing or building a new home. Of course, it must also be your first time buying.
Step two: Gather supporting evidence
If you are lodging with an approved agent, you – and if applicable – your spouse or partner must provide a copy of a valid form of identification. You must also provide evidence of citizenship or permanent residency.
If you are lodging on your own, you – and if applicable – your spouse or partner must provide a valid copy of a document from each of the four categories. This works out to be four documents per person. It should be noted that a single document cannot be repeated (a common mistake). The four categories are:
Category one One current document proving identity, evidence of citizenship or permanent residency
If you are an Australian citizen you can provide:
Australian birth certificate
Australian passport, or
If you are a citizen of another country:
Passport, and evidence of permanent residency or permanent residence visa.
A New Zealand citizen: Current passport.
Category two Evidence of a link between identity and person such as a passport or driver license. The document must include your photo and signature.
Category three One document proving the applicant/s live in Australia.
Category four One document proving the applicant/s current address.
Additional supporting evidence is required if any of the following applies to you:
Married – a copy of your marriage certificate.
Divorced – a copy of your divorce certificate.
Widowed – a copy of the death certificate of your spouse/partner.
Separated – a statutory declaration
Step three: Complete the application
If you are lodging with an approved agent, they
will take care of this step for you.
If you are lodging the application yourself, there are
usually guides available to help you navigate applications as they are
frequently lodged incorrectly.
When you find the application, print it out and answer with a blue or black pen. Remember to sign.
Step four: Lodge the application
If you are lodging your application through an approved
they will send the application on behalf of you.
If you are lodging the application yourself, find the appropriate address through your state or territory website. These can be found in the table above.
What can the first home owners grant be used for?
The first home buyers grant is rigid in its use. Once you are deemed eligible, it can basically only be used to contribute to your outstanding loan. This also makes it pretty hard to use for a deposit.
In fact, the grant is not actually paid to the buyers, rather when you get to the settlement period, the money is transferred to your lender and directly taken from your mortgage.
If you’re buying a house and land package, sometimes the grant is approved once you start the construction process.
When does the first home owners grant get paid?
The grant is typically paid at the time of settlement to your home lender so it can be directly deducted from your home loan. When building, the grant will be approved once your first mortgage repayment is due.
When does the first home owners grant end?
While the first home owners grant for established homes ended in 2014, there is currently no end date on the FHOG for new homes. However, always check the most up-to-date information before you apply as the grants have been subject to frequent change.
Can you get the first home owners grant twice?
No, the grant is a one-off payment to first home buyers.
Is the first home owners grant taxable?
you will not have to pay tax on your first home buyers grant.
How much is the first home owners grant?
FHBG calculator can be used to determine the sum of your first home buyers
grant based on your location and property.
What does the first home owners grant cover?
eligibility is established, the grant is automatically deducted from your home
loan. This ensures it directly pays a portion of your home loan.
Words by Michelle Elias
Are you looking to buy your first home soon? Get in touch with eChoice. Our brokers can help you understand the First Home Owners Grant in your state or territory and ensure your application goes smoothly. Plus, we have access to 100’s of mortgage products, so, we can help you find a competitive deal on your mortgage.