You’re almost there! You’ve spent years budgeting to buy your own home and now you just need that final cash injection to break into the property market.
Pop quiz time, hands on your buzzers, first-timers. Do you:
1) Continue living off two-minute noodles for another five years and hoard your pennies?
2) Cash-in your grandpa’s beloved stamp collection? Or
3) Ask your mortgage broker about this mystery thing they call the First Home Owner Grant (FHOG)?
That’s right, Option 3 is the winning answer and the good news we have for you is that the First Home Owner Grant has recently increased in many states of Australia!
What is the first home owner grant (FHOG)?
The FHOG is a national initiative designed to help young go-getters like yourself to swing a leg onto the property ladder. You can use the one-off grant as part of your deposit, or put it towards other purchasing costs. There are some major provisos: it must be used to buy or construct a brand new home that has not been previously occupied or sold, and it must be used as your place of residence. In some instances, substantially renovated properties that have undergone major structural changes may qualify.
Who is eligible?
Naturally, the Australian Government isn’t going to give away money to everyone who asks for it. The eligibility conditions for the FHOG are quite strict.
To be eligible for the FHOG, you or your spouse must:
• Intend to live in the home as your principal place of residence (PPR) for six to 12 continuous months, depending on the state or territory, within 12 months of settlement or completion of construction.
• Be aged 18 or over.
• Be an Australian Citizen or Permanent Resident.
You don’t qualify if you or your spouse have previously:
• Received a FHOG in Australia already.
• Owned a home in Australia, either jointly or separately, prior to July 1, 2000.
• Occupied, for a continuous period of at least six months, a home in which either of you acquired a relevant interest on or after July 1, 2000, in Australia.
• Depending on the state or territory in which you purchase your home, other conditions may apply. So please talk to us if you’re unsure if you’re eligible for the FHOG.
Could there be more good news?
Yes! The FHOG is currently under review, so it’s worth visiting your state’s office of revenue website from time to time to see what’s on offer.
It’s definitely worth checking out, because you may find you’re eligible for other big savings, like on stamp duty fees in some states. For example, from July 1, the Victorian Government has scrapped stamp duty for first homebuyers for properties up to $600,000, with further discounts for new or existing homes between $600,000 and $750,000. Stamp duty is usually one of the biggest expenses if you’re buying a home, so this may make all the difference to your ability to climb onto the property ladder sooner rather than later.
What’s available around the nation?
The winner of the “most generous” award goes to the Northern Territory. Those wonderful peeps who call the Red Centre home are offering $26,000 to eligible first-home buyers, regardless of the value of the property. In Queensland, first home buyers can receive $20,000 until June 30 (then its $15,000) for properties valued up to $750,000. If you can live with the weather, Tasmania may be the place to buy, with no value cap and a $20,000 FHOG until June 30, when it reverts to $10,000.
In South Australia (SA) and Western Australia (WA), the FHOG is $15,000. In SA, the value cap is $575,000, while in WA, it depends on geographic location (for Perth, its $750,000). Victoria and NSW offer a $10,000 FHOG for properties valued up to $750,000, but from July 1 the FHOG will double to $20,000 for new homes built in regional Victoria. Lastly, the ACT offer $7,000 for properties up to $750,000. (Data current March 2017).
We’re here for you.
Talking to a mortgage broker about purchasing your first home is always a great idea. We’re happy to give you the benefit of our knowledge, even if you’re not quite ready to buy. You can ask us to help you create a budget, establish a plan to clear off your credit card and other debts, and save a deposit. When you’re ready, we are here to help you secure a loan and choose a home that you can realistically afford, given your income and personal financial circumstances. Get an expert on your team by calling us today!
Think and Grow Finance 03 8390 5855 or email [email protected]