First Home Owner Grant and your home loan deposit

First Home Owner Grant (FHOG)

The FHOG scheme is a national scheme funded by the Federal Government, but administered through each state or territory Revenue Office. The amount available ranges from $5,000 up to $25,000.

In Queensland, the First Home Owner Grant has been replaced by a Great Start Grant for purchasers of new homes up to the value of $750,000.

The $15,000 Great Start Grant is the new First Home Owner Grant (FHOG) initiative from the Queensland Government to help you get your first home sooner. To be eligible for the grant, you need to purchase a new home, buy and 'off the plan' property, or by property and build your new home yourself. To qualify for the grant, the property value must be less than $750,000. 

If you are eligible for the Great Start Grant, you may also be eligible for the first home buyers concession on the transfer duty (formerly called stamp duty). You can apply for a concession on:

  • New homes up to the value of $505,000 and receive the maximum concession of $8,750 of your transfer duty. Concessions apply for new homes up to the value of $550,000.
  • Vacant land where you intend to build you home to the value of $250,000 and get a 100% concession on transfer duty. Reduced concessions are granted for land up to the value of $399,999.

The first home buyers concession decreases in value for both new homes and vacant land purchases as the value of the property increases. To estimate your transfer duty on your new home, try our calculator or speak to one of specialist for expert home loan advice.

 

First Home Owner Grant and your home loan deposit

If you’re eligible, the First Home Owner Grant (FHOG) it can be a fantastic bonus when it comes to budgeting for the purchase of your first home. But it’s important to correctly factor the FHOG into your calculations.

The FHOG can be counted as a contribution to the value of your home purchase and so it can be included in calculations of your Loan to Value Ratio (LVR). This means that you may be able to avoid paying Lenders Mortgage Insurance if the FHOG and your genuine savings total at least 20% of your property's value. However, if you are looking to get the First Home Owner Grant to build a new home on a block of land, you must keep in mind that the grant will not be paid until construction stage, and so you mustn’t factor it into the land purchase.

Mortgage Choice Bundall will work with you to assess if you are eligible for the First Home Owner Grant, as regulations and grant value vary from state to state. They will also help you work through your planning if you are looking to buy and build to make sure you’ve correctly budgeted for all aspects of your home purchase.

Applying for the First Home Owner Grant

In most cases

1. The lenders are able to act as agents for the Revenue Office.

This allows the First Home Owner Grant funds

2. To be available at settlement or at the first progress payment if you are building your home.

If you apply directly to the Revenue Office

4. Funds will not be available until after settlement or completion of the home if you are building.

Mortgage Choice Bundall can help you evaluate your options. Call Mortgage Choice Bundall today on 07 5504 5569 for an appointment and let us help you achieve your financial goals.

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Posted in: First home buyers

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