What Is First Home Owner Grant (FHOG) And How Does It Help In Buying Your First Home?

Having your own house is a dream come true for every individual. One needs to consider many aspects before making a property investment decision. These factors include property prices, location, and returns on investment. However, finance is an important element for investing in the property market. 

Buying a house for the first time is a lifetime investment for every person. Therefore, proper financial planning is required before making any decision. 

Buying your first home involves huge expenses like repayment of  home loans and stamp duty. But, they come with the additional burden of debts and interest payments. 

Thus, the Australian government offers First Home Owner Grant to reduce the financial burden of a first home buyer. Let’s start with understanding the meaning of the first time home owners.

First Home Owner Grant (FHOG)        

First Home Owner Grant is a grant given to individuals for buying their first house or building their own home. This program was introduced in Australia on 1 July 2000 with the aim of helping individuals achieve their dream of having their own house. Under this, a one-off payment is given to the buyers that offsets the effects of GST on the home ownership. 

Eligibility Criteria      

There are some guidelines that specify who all are eligible for getting  First Home Owner Grant. The eligibility criteria for the individuals in Australia are listed below:

1. At least one applicant is to be an Australian citizen above or equal to 18 years of age.
2. An applicant must be buying a house for the first time or building their own first house. 
3. Applicants must use the property as a residential place for continuous 6 months within 12 months of purchase or construction.
4. Applicants or their partners do not own a residential property in Australia.

Benefits Of FHOG For First Time Home Buyers     

The common benefits enjoyed by Australians due to FOG are: 

1. Government Assistance With Funds

The main purpose of providing the First Home Owner Grant is to reduce some financial burdens faced by first time buyers. This scheme also helps in  encouraging youth to become independent by having their own house. The Australian government tries to help its citizens to achieve their dream home. 

2. Stamp Duty Concessions

It is an initiative by the states and territories of Australia for the first home buyers. Stamp duty is the tax imposed on the property buyers. First Home Owner Grant offers concessions on stamp duties for first time buyers. Stamp duties concessions depend on the value of the home you are buying for the first time. 

State-Wise Benefits Of FHOG In Australia

Different states have different guidelines for First Home Owner Grant. Fund assistance to first-time buyers varies across states. Given below are some benefits given to individuals in various states:

1. Queensland

For buying or building a new home valued at up to $750,000, a grant of $15000 is given. For properties valued up to $550000, stamp duty concessions are given to first home buyers.

2. Victoria

New homes valued up to $750,000 grant of  $10,000 given for urban homes and $20,000 for homes in regional Victoria.

3. New South Wales

A Grant of $10000 is given for a home valued at $600000. Buyers are exempted from paying transfer duty on new and existing homes valued at less than $650000.

4. Western Australia

A Grant of $10000 for new homes purchased south of the 26th parallel of up to $750,000. And north of the 26th parallel of up to $1m for new homes. 

5. South Australia

Up to $15,000 grants are given for new homes valued up to $575,000 for property used as a principal place of residence for a minimum duration of 6 months.

6. Tasmania

Grant of $30,000 given for  New homes or off-the-plan properties only Fifty percent discount on property transfer duty for first home buyers of established homes that have a dutiable value of $500,000 or less.

7. Northern Territory

A grant of $10,000 is given for new homes only. Moreover, there is a range of government funds, concessions, and rebates available for first home buyers and other Northern Territory home buyers.

8. Australian Capital Territory

Home Buyer Concession Scheme is followed that provides a full stamp duty concession for eligible applicants.

Conclusion    

Before buying your first home, people generally look out for all the financial options available. But, unfortunately, a huge amount of financial burden occurs, and you need to fulfill all your financial commitments.

Therefore, the first home buyers need to get advice from professionals about the fund requirements for investing. Experts in real estate like the Quarter Acre team guides you about all the financial aids or financial options available for you. Hence, you make informed decisions about property investment and ensure that you reap all the benefits.