First Home Owners Grant for Home Buyers in Australia

What is the First Home Owners Grant

The First Home Owner Grant (FHOG) is a national scheme funded by the Australian states and territories and administered under their own legislation.

It was originally introduced on 1 July 2000 to offset the effect of the GST on home ownership, but has been continued, as an incentive to assist the Australian house building industries.

How much is the First Home Owners Grant

The normal rate for the First Home Owners Grant is $7000, payable to eligible first home owners.

From January 1st 2010:

Each state in Australia will be able to set limits on the house prices that are eligible for the First Home Owners grant from January 2010.

Examples of these limits, so far declared, are:

• $1,000,000 Queensland
  
• $ 750,000 NSW
  
• $ 600,000 Victoria
  
• $ 750,000 WA
  
• $ 750,000 NT
  
• Not yet stated: ACT, SA, TAS
  

Special Notice:

From 14 Oct 2008 until 30 September 2009, the FHOG will be doubled to $14,000, with an Extra $7,000 for new home buyers

This means that a First Home Buyer, can get a grant $14,000 for an existing property, or $21,000 for a New build property, towards the cost of the property.

From 1 October 2009 to 31 December 2009 this extra grant will be reduced and the total grant will become $10,500 for established homes and $14,000 for new homes.

From 1 January 2010 the grant will revert to just $7,000 again.

Eligibility for the First Home Owners Grant

Some of the criteria to be satisfied for eligibility for the First Home Owners Grant (FHOG)

• You and your spouse/partner must not have previously received a grant in any other State or Territory of Australia.
  
• You and your spouse/partner must not have owned any residential property, either jointly, separately or with some other person prior to 1 July 2000, in any State or Territory of Australia.
  
• At least one applicant must be a permanent resident, or Australian citizen, at the time of settlement or completion of construction of the home .
  
• At least one of the applicants must occupy the home as their principal place of residence for a continuous period of at least 6 months, commencing within 12 months of either settlement or completion of construction.
  
• There is no income Limit, for consideration for this grant.
  
The property does not cost more than $750,000.

What happens if you claim the First Home Grant but are not eligible

If you are deemed to be not eligible for the grant, after you have received it, the Government can claim it back, and sometimes apply penalties, if intended fraud is involved.

A report in the Queensland Sunday Mail on 13th September 2009 stated the following:

Grant or Concession ?

Some confusion arises over people who have owned property overseas and whether they are eligible for the first home owner Grants and concessions.

The First Home Federal website quotes the following:

Grant:

Concession:

The Federal website covering the main rules for all of Australia is at:

• www.firsthome.gov.au

Each State and Territory in Australia has its own grant scheme, and different rules may apply.

eg:

QLD

At least one applicant must be an Australian citizen or a Permanent Resident at the time of Application for the grant

The application must be lodged within 12 months of completion

These details at March 2009 from the Application form PDF file

WA:

At least one applicant must be an Australian citizen or a Permanent Resident at the commencement of the eligible transaction (ie. at the date the contract is made). www.dtf.wa.gov.au

In WA you may also be entitled to the Home Buyers Assistance Account. For properties under $400k

VIC:

You (or at least one applicant) must be a permanent resident or Australian citizen at the time of settlement or completion of construction of the home. www.sro.vic.gov.au

For contracts entered into after 1 January 2010, to qualify for the Grant, the price of the property or construction of the home must not exceed $750,000.

In Victoria, if you are eligible to receive the FHOG, you may also be entitled to receive an additional payment called the "First Home Bonus".

This payment is as follows:

Contract date: 1 May 2004 to 30 June 2009

Purchase price not to exceed $500,000

• $ 3,000 for established homes
  
• $ 5,000 for new homes only.
  

Contract date: 1 July 2009 to 30 June 2010

Purchase price not to exceed $600,000

• $ 2,000 for established homes
  
• $11,000 for new homes only in Non Regional Locations
  
• $15,500 for new homes only in Specified Regional Locations
  

Contract date: 1 July 2010 to 30 June 2011

Purchase price not to exceed $600,000

• $13,000 for new homes only
  
• $19,500 for new homes only in Specified Regional Locations
  

Source: Victoria First Home Bonus

Source: www.revenuesa.sa.gov.au

First Home Savers Bank Account

First Home Saver Accounts (FHSAs) are available for Australians aged 18 and over to save for their first home

The Government will contribute an interest rate of 17 per cent per year, but only on the first $5,000 (indexed) of individual contributions made each year.

This means an individual contributing $5,000 will receive a Government contribution of $850

Interest on these accounts will be taxed at 15%

Before an account holder can withdraw the funds, they must have made minimum contributions of at least $1,000 over the course of at least four separate financial years

An indication of the value of this is in the following example

If you pay $5,000 per year into that account, with the 6% interest (quoted by one bank offering these accounts) + the government subsidy, you end up with $25,949 at the end of 4 years.
That is actually equal to an interest rate of 14.65%, with the bank paying 6%**, and the Government effectively giving 8.65% extra.
These figures are before the Tax is deducted

• First Home Saver Accounts - Fact Sheets

Note: ** The quoted 6% Interest rate will be fixed until 30 June 2009. After 30 June 2009, the interest rate reverts to the standard variable FHSA interest rate