Buying your first home is a huge step—financially and emotionally. The good news? There’s support available.
The First Home Owner Grant (FHOG) is a government initiative aimed at easing the path to home ownership. The First Home Owner Grant (FHOG) supports eligible buyers with clear criteria and benefits.
This $10,000 grant helps first-time buyers purchase or build a new home. But understanding the process, however, can feel challenging.
If you’re in Victoria and planning to buy or build your first new home, understanding how the FHOG works can make a real difference to your budget and planning.
What Is the First Home Owner Grant?
The First Home Owner Grant (FHOG) is a one-off payment provided by Australian state and territory governments to eligible first-time homebuyers.
Introduced in 2000 to offset the impact of GST on home ownership, the grant has grown into an economic incentive tool mainly aimed at encouraging the construction of new homes.
In most states, including Victoria, the grant provides $10,000 when you buy or build your first new home.
This could be a house, townhouse, apartment, unit, or substantially renovated property that hasn’t been previously occupied or sold as a residence.
Eligibility Requirements For The First Home Owner Grant (FHOG)
While specific requirements vary by state and territory, general eligibility criteria include:
| Requirement | Details |
|---|---|
| Applicant Status | Must be a ‘natural person’ (not a company or trust) |
| Age | At least 18 years old (with some discretionary exceptions) |
| Citizenship | Australian citizen or permanent resident |
| Previous Property Ownership | Neither you nor your spouse/partner can have previously owned property in Australia before 1 July 2000 or lived in a property you owned for more than 6 months since that date |
| Property Type | Must be a new home or substantially renovated property |
| Occupancy Requirement | Must live in the home as your principal place of residence for 6-12 months (varies by state and contract date) |
| Property Value | Must not exceed state-specific price caps (e.g., $750,000 in Victoria for contract to build) |
It’s worth mentioning that the property value limits vary significantly between states.
For example, in NSW, the purchase price must not exceed $600,000 for newly built homes, while the combined cost of land and construction must not exceed $750,000.
Benefits Of First Home Owner Grant (FHOG) Beyond The Grant
The FHOG offers more than just the immediate financial support of $10,000.
Consider these additional advantages:
1. Reduced Deposit Requirements: The grant can form part of your deposit, reducing the amount you need to save.
2. Potential Stamp Duty Concessions: Many states offer stamp duty exemptions or concessions for first-home buyers, particularly when purchasing new properties.
3. Access to Additional Schemes: The FHOG may open doors to other government initiatives, such as:
-
- First Home Guarantee (allowing purchases with just a 5% deposit)
- Family Home Guarantee (supporting single parents with deposits as low as 2%)
- Regional-specific bonuses and concessions
4. Quality Assurance: New homes typically come with builder warranties and modern features, potentially reducing maintenance costs in the early years.
What Qualifies As A ‘New Home’?
A new home is one that has:
- Not been previously sold or occupied as a residence
- Not been leased or used as short-term accommodation (e.g. Airbnb)
This means even if a property looks new, it may not qualify if the previous owner lived in it, rented it out, or used it for guests.
How To Apply For A First Home Owner Grant (FHOG)?
Applying for the FHOG is straightforward but requires attention to detail. If you need the grant for settlement or progress payments, lodge your application through an approved agent, typically your bank or a home loan broker in Melbourne.
They handle the paperwork, requiring you to provide identity documents and sign the form. If applying directly with the state revenue office, lodge within 12 months of settlement or construction completion.
Direct applications need three identity documents per applicant, covering citizenship, photo ID, and proof of Australian residency.
Here’s a quick overview of the documents you’ll need:
Category 1 (Citizenship/Residency)
- Australian birth certificate, passport, or citizenship certificate
- OR a valid foreign passport with proof of permanent residency
Category 2 (Photo ID)
- Driver’s licence, passport, or other government-issued ID
Category 3 (Residency in Australia)
- Medicare card, car registration notice, or Centrelink card
Additional documents may be required for applicants who are separated, divorced, widowed, or members of the Australian Defence Force.
A finance broker in Melbourne can guide you, ensuring all documents meet requirements and avoiding delays.
When Will The Grant Be Paid?
The timing of your FHOG payment depends on:
- Whether you’re buying or building
- Whether your application was lodged through an approved agent or directly with the State Revenue Office
Generally, if you’re building, the grant is paid at the first progress payment (drawdown). If you’re buying, it’s usually paid at settlement.
Strategic Tips For First Home Buyers
1. Consult a Specialist: Engage a home loan broker in Melbourne who specialises in first-home buyers to navigate the complex eligibility requirements and application process.
2. Check All Available Concessions: The FHOG is just one of many potential benefits. A knowledgeable mortgage broker in Melbourne can help identify all applicable concessions and exemptions.
3. Consider Construction Loans: Building a new home often provides better grant opportunities than buying established properties. Understanding how a house loan works for construction is essential.
4. Factor in the Occupancy Requirement: Remember that you must live in the property as your principal residence for the required period (typically 6-12 months).
5. Don’t Rush the Process: Ensure all documentation is complete and accurate before submitting your application to avoid delays.
6. Plan for the Long Term: While getting into the market is important, consider how your mortgage loan will affect your finances over time.
7. Understand the Importance of Mortgaging a Home: Be clear about all costs involved, including mortgage insurance if your deposit is less than 20%.
8. Regional Opportunities: Some states offer enhanced grants for properties in regional areas, which can make a significant difference in affordability.
Take The Next Step With Credit Hub
Ready to secure the First Home Owner Grant and buy your first home? Credit Hub, your trusted home loan broker in Melbourne, makes it easy. Our dedicated personal managers guide you through eligibility, paperwork, and mortgage loan options with expert care.
With our advanced online platform, you’ll access top rates, like 5.59% for home loans, and exceptional service—all in one place. Contact Credit Hub or apply now to start your journey!
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