Understanding the First Home Owner Grant

Let’s face it, the current property market is not making it any easier for first home buyers – and any help is most welcome. So if you’re currently thinking about buying your first home you need to know about the First Home Owner Grant (FHOG). It’s basically a helping hand from the government to get you started on the property ladder.

Buying a home is probably the biggest financial commitment of your life so it’s also important to have an idea of what costs to expect. As well as the property purchase price, you have to fork out for stamp duty (a tax), conveyancing/legal fees, mortgage application fees and possibly mortgage insurance if your deposit doesn’t meet the lender’s criteria. These costs can really add up – and that’s where the FHOG could help.

So do you qualify for the grant? And how much do you get?

Understanding the FHOG

The FHOG is run by the individual state and territory governments, and each pay out different amounts and have slightly different terms and conditions. Depending on where you live the conditions will vary, including:

  • the amount of the grant (anywhere from $3,000 to $26,000)
  • the maximum value of the property you can buy, called a cap
  • the type of property you can buy. It might have to be a home that is newly built or has been substantially renovated
Can I apply?

There are some basic conditions you must meet to be eligible for the grant. These include:

  • You (or your spouse/partner) must be an Australian permanent resident or citizen and have never owned a property before
  • You (or your spouse/partner) must have never received the grant before
  • You must be at least 18 years of age
  • The total value of the property must not exceed the cap (this differs by state)
  • A business, trust or company cannot apply for the grant
  • You must occupy the property for a minimum period after purchase or after building works are completed

This means you’ll need some paperwork to prove you’re eligible – such as proof of identity, the contract of sale or the contract to build. It usually takes around 10 days to process the applications

Applying for the Grant

There are two ways you can apply for the FHOG:

  • via your mortgage provider (bank or financial institution), or
  • by submitting the forms to your state government department.

If you are buying a new property or off the plan the grant is paid at settlement. If you are

building it is paid directly to the builder at a defined time during building works.

It is also worth checking to see what other government incentives are on offer. There may be stamp duty concessions for first home buyers where you live, for example. Every little bit helps!

Please arrange a convenient time to speak to Jesse Bruno, our mortgage broker at CentraMoney by clicking here.

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Zac Zacharia (Managing Director) has been assisting clients to create wealth and secure their futures for over 14 years.

He is also an accomplished presenter and educator

Co-authoring the popular investment book, Property vs Shares.