For many young people, buying their first home can seem like an impossibility. However, that is not always the case, as long as they know about the resources available to them. For example, some Australian residents can qualify for the First Home Owner Grant (FHOG). This is a form of financial assistance that they can use to pay for buying or building a new residence.
But what exactly is an FHOG? Essentially, it is a government-provided one-off payment that can amount to a few thousand dollars. The specifics can vary per state and region. For this reason, it is highly recommended that prospective home buyers reach out to a real estate agent for additional assistance. To help you get a head start on the process, read on for more information about this grant:
Who Is Eligible for FHOG?
While qualifications for FHOG are largely dependent on different states and regions across the country, there are conditions that are common across the board. Firstly, individuals who are eligible for FHOG need to be first-time homeowners who have never previously owned a residence in Australia. Secondly, qualified persons have to be more than 18 years old and must be an Australian citizen or have the status of a permanent resident. Lastly, the eligible person must plan to live in the purchased property for at least six months.
FHOG payments can also be paid in conjunction with other concessions or exemptions for qualified home buyers. Even a pensioner who has not previously owned a home in Australia is eligible to get FHOG in addition to their other payments. However, FHOG has limits for individuals who are planning to get a home loan. Two eligible parties can still apply for a joint mortgage and combine their FHOG as part of the deposit on the property. But if any one of the two home buyers has previously gotten FHOG, they cannot receive it again.
Amounts and FHOG Conditions per AU Territory
The specific amount of the FHOG depends on the region and the value of the home. FHOG amounts in the Australian Capital Territory can go up to $7,000 as long as the new or substantially renovated property is valued up to $750,000. In New South Wales, the FHOG amount for new homes is up to $20,000. It applies to homes that are going to be built, previously unoccupied houses, and new residences worth up to $750,000. In Northern Australia, the FHOG is a $10,000 one-time cash payment. On the other hand, qualified homebuyers in South Australia can receive an FHOG payment of $15,000 for new residences up to $575,000.
The FHOG amount is also the same in Queensland, but recipients can buy or build a home that costs up to $750,000 with their $15,000 payment. In Tasmania, eligible residents must build or purchase a new house to get an FHOG payment of up to $10,000. FHOG amounts in Victoria start at $10,000 and can rise to $20,000, depending on the cost of the new home, with a limit of $750,000.
Lastly, homebuyers in Western Australia can get FHOG payments of up to $10,000. It is important to keep in mind that these amounts are generalised and are subject to change. Factors like stamp duty and discounts can affect the final price of the FHOG. Applicants should be aware of the conditions surrounding FHOG based on their state of residence to make things less confusing.
What Counts as a New Home
The term “new home” has a specific set of definitions within the parameters of FHOG. For the most part, a newly built residential property that has not been occupied or sold yet qualifies as a new home. Moreover, houses are not the only buildings that count as new homes. In fact, apartments, units, and townhouses can also be considered as such. A house that has undergone extensive remodelling (a flipped house) can also be called a new home. The renovated features of the residence can make it a completely different property that no one else has lived in yet.
First-time homebuyers who are interested in purchasing a renovated property can still receive FHOG payments. This is because most or all of the home has been fixed or replaced, making it a new place. It is for this reason that older residences and investment properties (mostly holiday houses) do not count as new homes. After all, at the end of the day, the FHOG is not only designed for people who need a new place to live in but it also stimulates the local building industry.
Moving to a new place can be an exciting time, especially for persons who have yet to own a home. Whether they are in search of a temporary space or a long-term abode, purchasing their first home can be easier if they qualify for the FHOG. To ensure the timely payment of the sum, homebuyers should lodge their application with their local government offices or with an approved agent.
Do you want to know more about the first home buyer grant? Get in touch with Gerard Partners today!