The First Home Owner Grant (FHOG) started back in 2000 and was introduced to offset the new Goods and Services Tax (GST).
Over its history the FHOG has seen many changes. At one point it was available to all first home owners but at times it appeared to contribute to increasing prices for existing dwellings, so now it is only available to First Home Buyers building a new home or buying a newly built townhouse or apartment, in most states. Its primary aim now is to support the home building sector.
Although this is a nationwide grant, it is financed by the states and governed by their individual legislations. The eligibility criteria and funding is different for each state and territory.
Several states adjusted their FHOG at the beginning of 2017 or are adjusting in the new financial year.
John Kennedy of Mortgage Choice in Mudgeeraba summarizes these changes State-by-State.
From 1 July 2017 – First home owner grant returns to $15 000, from the 12 month special of $20 000. To be eligible for the grant, the property value must be less than $750,000.
To qualify, you must be purchasing a new home, buying an 'off the plan' property, or buying land and building your first home. Further, you must move into the home as your principal place of residence within 1 year of completing the transaction and remain in the home for 6 months.
The Qld FHOG is not available for the purchase of established homes.
However, in Queensland stamp duty is waived for all first home buyers, (i.e. established or new builds), where the property is under $500K. There is a partial stamp duty exemption for first homes valued between $500K and $550K then standard stamp duty on properties above $550K.
New South Wales
No big changes here, the last change being the 1st of Jan 2016, when the NSW grant reduced to $10 000 for new homes purchased for less than $750 000.
NSW also offers Stamp Duty concessions on new properties under the value of $550 000 or on vacant land under the value of $450 000.
To qualify for any of these you must live in the home for at least 6 months of the first year of owning the property.
The NSW FHOG is not available for purchase of established homes.
Some big changes in Victoria. As of 1 July 2017 the FHOG increases to $20 000 for new builds in regional Victoria up to the value of $750 000. FHOG remains at $10 000 for metropolitan areas.
The state government also revealed, as of 1 July 2017, it would abolish stamp duty for first home buyers purchasing properties under $600 000 and reduce duty on new builds valued between $600 000 and $750 000.
For those buying off the plan stamp duty concessions would also apply, but as of the 1 July 2017 these concessions will only be available to home buyers who live in their home as their principal place of residence. Previously first home owners who were building for investment purposes were considered for duty concession.
The Vic FHOG is not available for purchase of established homes.
As of 1 July 2017 the FHOG will revert to $10 000 from its 18 month special of $20 000.
This grant is for new homes, homes off the plan and owner/builder homes.
The TAS FHOG is not available for purchase of established homes.
No new changes announced. The FHOG remains up to $15 000 for new builds or significantly renovated, houses, town houses or units up to the value of $575 000.
To qualify all applicants must occupy the new home for at least 6 months within 12 months of completion.
The SA FHOG is not available for purchase of established homes.
If you are thinking of joining the property market in Western Australia, 2017 would be a great year to do it. From Jan 1 to Dec 31 2017 the FHOG increases to $15 000 for new builds valued up to $750 000 south of Peron Peninsula (26th parallel), and up to $1 million in the more remote regions north of this line.
There is also a separate grant scheme called the Home Buyers Assistance Account. It provides first home owners up to $2000 to assist with upfront expenses like conveyancing fees and building and pest inspection fees. To be eligible for this the home may be established but must cost less than $400 000, and must be purchased through a licensed real estate agent.
The FHOG in the Northern Territory is the most generous in the country at $26 000 for purchase or construction of a new home. It also has applies to all new homes having no limit on the value of the home and it is not means tested.
To be eligible at least one of the applicants must occupy the new home as their principal place of residence for 6 out of the first 12 months after completion.
Up until the 30th of June 2017, if purchasing an established home in the Northern Territory you can apply for a 50% reduction in stamp duty up to $10 000.
Australian Capital Territory
The FHOG in the ACT is the lowest in the country reducing on the 1st of Jan 2017 to $7000. The ACT FHOG has seen 2 reductions since Jan 2016 when it went from $12 500 to $10000 and now down to $7000. To be eligible the property must be less than $750 000, and you must occupy the new home for the first 12months after completion.
The ACT FHOG is not available to established homes.
At Mortgage Choice in Mudgeeraba we can take you through all the relevant grants and incentives available to you in your ‘new home’ state. We will aid you in determining your eligibility and prepare all the relevant paperwork for you.
The first home owner grant can be a valuable contributor to your home loan deposit and help you onto the property ladder sooner.
Call today (07)5559 2563, if you have any questions.