First Home Owner Grant and deposit schemes in Australia

Whether it’s due to rising prices or difficulty budgeting, buying your first property can be a hard personal finance nut to crack. That’s why it’s important to consider all the options available to you as a first home buyer.

Thankfully, there’s no shortage of government schemes and subsidies out there, chief among them the First Home Owner Grant (FHOG). Below, we take a look at what’s on offer and how the grant can help you get a foot on the property ladder sooner.

What is the First Home Owners Grant?

On 1 July 2000, the Howard Government introduced the Goods and Services Tax (GST) in Australia. To offset the roll on effect of this new tax on Aussies buying their first home, the First Home Owner Grant scheme was launched nationally.

The grant initially offered a one-off lump sum to first home buyers whether they were considering established properties or freshly minted homes. Today, most states require the property to be a new or substantially renovated home.

The size of the grant varies by location, and in some cases it’s only available when purchasing properties of a certain value. If you’re interested in applying for the FHOG, you can do so directly via the Revenue Office in your state or territory or through your lender when you apply for a home loan.

Who is eligible for the First Home Owner Grant?

The FHOG differs across states and territories, and each region has its own set of conditions you’ll need to satisfy in order to be eligible. The criteria common across all versions are:

  • Both applicants must be at least 18 years old.
  • At least one applicant must be a permanent resident or Australian citizen.
  • You must be buying a home to live in, not as an investment.
  • You have not previously owned a home in Australia, either jointly or separately.
  • You must be a natural person, not a company or trust.
  • You must move into the home within 12 months of construction or purchase and reside there for 6-12 continuous months (depending on the state or territory).

The FHOG is not means tested, so your personal wealth or income won’t be a factor when judging your eligibility.

Importantly, if you are approved for the FHOG and it’s revealed that you provided false or misleading information in your application, the grant will have to be returned and you may face a penalty or even prosecution.

Can the FHOG be used to buy any property?

The FHOG can be used to purchase a house, townhouse, apartment, unit or similar property, so long as it meets the following eligibility criteria:

  • It must be newly built or substantially renovated.
  • The amount paid for the home or the contract price for construction must not exceed a certain limit (see each state or territory for details).
  • It must not have been previously sold as a place of residence.
  • It must not have been occupied as a home or used for short-term accommodation.
  • If renovated, the renovations must have been carried out by the seller and not a previous owner.

New South Wales - First Home Owner Grant (New Home)

Eligible first home buyers across NSW who purchase a new or substantially renovated home can receive the following:

  • $10,000 grant when buying a property valued up to $600,000 (this increases to $750,000 when buying land to build your home).
  • Full exemption on transfer duty (previously known as stamp duty) on properties valued up to $650,000. A concessional rate applies on properties valued between $650,000 and $800,000. 
  • Full exemption on transfer duty when purchasing vacant land valued less than $350,000. A concessional rate applies if the land is valued between $350,000 and $450,000.

Queensland - First Home Owner Grant

Queensland's FHOG is slightly more generous than its southern neighbours. So long as the eligibility criteria is met, first home buyers can receive the following:

  • $15,000 grant when buying a property valued up to $750,000.
  • Exemption on transfer duty on properties valued up to $550,000. 
  • Exemption on transfer duty when purchasing vacant land valued less than $400,000.

South Australia - First Home Owner Grant

If you live in South Australia and are buying or building your first home, you may be eligible for the following:

  • $15,000 grant when buying a property valued up to $575,000.
  • South Australia does not offer any stamp duty exemptions or concessions for first home buyers.

Northern Territory - First Home Owner Grant

The Northern Territory offers a number of generous incentives to go with the FHOG, detailed below:

  • $10,000 grant when buying a property.
  • Household goods grants of up to $2,000 for those eligible for the FHOG.
  • Territory homeowner discount on stamp duty up to $18,601 (or $23,928.60 for first homeowners if you bought an established home valued at less than $650,000 prior to 6 May 2019).
  • Home renovation grants up to $10,000 (only if you’ve bought an established property as your first home and will be employing professionals).

Tasmania - First Home Owner Grant

Tasmanians building or buying a new home that will serve as their first property can apply for the following:

  • $30,000 grant when buying a property of any value between 1 April 2021 and 30 June 2022.
  • $20,000 grant when buying a property of any value between 1 July 2016 and 31 March 2021.
  • 50% discount on transfer duty on properties valued up to $500,000 purchased between 16 March 2021 and 30 June 2022 (on the condition that you haven’t received a first home owner grant or duty concession in Australia before).

Victoria - First Home Owner Grant

If you’re purchasing a newly-built or substantially renovated property in Victoria for the first time, you can take advantage of the following: 

  • $10,000 grant when buying a property valued up to $750,000.
  • Full exemption on transfer duty on properties valued up to $600,000. A discount applies on properties valued between $600,001 and $750,000. 

Western Australia - First Home Owner Grant

First home buyers in Western Australia can receive the following so long as the eligibility requirements are met:

  • $10,000 grant when buying a property
  • $2,000 homebuyer assistance grant when purchasing an established property valued up to $400,000 (to use on expenses like pest and building inspection fees, conveyancer fees, and upfront home loan fees).

Australian Capital Territory - First Home Owner Grant

In the ACT, the FHOG grant has been replaced by the Home Buyer Concession Scheme. Under the scheme, transfer duty will be waived or reduced when purchasing new or existing homes and vacant residential land. To apply:

  • You must be at least 18 years old.
  • The total gross income of all buyers, including their partners, must not exceed certain income thresholds.
  • All buyers, including their partners, must not have owned any other property in the last two years.
  • At least one buyer must move in within 12 months of purchasing or completing construction on the property and live there continuously for at least one year.

The income thresholds take into account the number of dependent children you and your partner have, and increase by $3,330 for each child you care for together. More details are provided on the ACT revenue Office website.

Can you purchase an existing property with the FHOG?

While you can use the FHOG to purchase an existing home, it must have been substantially renovated by the seller (not a previous owner) to be eligible. What’s more, the home must not have served as a residence for the seller, builder or a tenant prior to, during or after renovations.

To be considered substantially renovated, the seller must have removed or replaced most of the structural or non-structural components of the building. Renovations limited to a single room or cosmetic work (such as a new coat of paint) won’t suffice. 

Can the FHOG be used as a deposit?

Yes. The purpose of the grant is to help bring down the costs associated with buying and owning a home. Just keep in mind that receipt of the grant will depend on when you apply and whether you are building or buying. So if you intend to use the grant to meet your deposit requirements, there’s a chance the timing might not work out in your favour.

Which supporting documents will I need?

When applying for the FHOG, you will need to provide proof of identity. This might include:

  • Australian birth certificate.
  • Australian passport.
  • Australian citizenship certificate.
  • Foreign passport and current Australian Visa (if born overseas).
  • Australian driver’s licence or proof of age card.
  • Medicare card, car registration, or debit/credit card.
  • Utility bill, bank statement, or insurance policy (for evidence of residential address).

Contract to purchase a new home or off-the-plan home

If you’re buying a new home, including off-the-plan, manufactured and kit homes, you might be asked to provide the following documents:

  • A copy of the contract for sale of land, signed and dated by the vendor and applicants.
  • A statement from the seller (or their legal representative) confirming the home has not been previously occupied since completion of construction.
  • A registration confirmation statement or current title search showing the applicants are the registered owners.
  • A final inspection certificate issued by the local council or private building certifier.

Substantially renovated homes

If you are purchasing a home that has been substantially renovated, you might have to attach the following documents to your application:

A copy of the contract signed and dated by the vendor and applicants.

A statement from the seller (or their legal representative) confirming the home has not been previously occupied or sold as a place of residence since it was renovated.

A registration confirmation statement or current title search showing the applicants are the registered owners.

A final inspection certificate issued by the local council or private building certifier.

A statement from the seller confirming that the sale is a taxable supply under the GST Act and was in the course of the seller’s enterprise.

Contract to build a home

If you are arranging for the construction of a new home, you might have to provide the following documents:

  • A copy of the contract to build, signed and dated by the builder and applicants.
  • A registration confirmation statement or current title search showing the applicants are the registered owners.
  • A final statement/invoice from the builder.
  • A copy of the occupation certificate or a final inspection certificate, issued by your local council or private building certifier.
  • A copy of a current valuation by a qualified valuer, or a copy of a current stamped contract or transfer for the purchase of the land.

Owner-builder

If you are building the home yourself, you might have to provide the following documents:

  • A copy of council approval for laying the foundations or receipt for the foundations.
  • A registration confirmation statement or current title search showing the applicants are the registered owners.
  • A copy of the occupation certificate or a final inspection certificate.
  • A detailed list of building costs.
  • Copies of receipts equal to the grant amount
  • Evidence of the value of the land on the date construction commences.
  • An independent third-party valuation or market appraisal of total value of the property (house and land) once construction is complete.
  • A final inspection certificate issued by the local council or private building certifier.

Are there any other grants and schemes?

There are a number of government programs aimed at helping Australians secure their first home. Many of these can be used in conjunction with one another, potentially shaving more time off your home ownership journey.

First Home Loan Deposit Scheme

The First Home Loan Deposit Scheme (FHLDS) lets eligible first home buyers purchase a home with a deposit of just 5%. 

Typically, borrowers with a deposit below 20% will have to pay Lenders Mortgage Insurance (LMI), which protects the lender in case they default on their loan. Under the FHLDS, the government will provide a guarantee to the bank for the remaining deposit requirement.

To be eligible for the First Home Loan Deposit Scheme, you must:

  • Apply as an individual or couple (married or de facto).
  • Be an Australian citizen at the time you enter the loan.
  • Be at least 18 years of age.
  • Have a maximum income of $125,000 for individuals or $200,000 for couples.
  • Intend to be owner-occupiers of the purchased property.
  • Be first home buyers who have not previously owned, or had an interest in, a property in Australia.

The full list of participating lenders can be found on the NHFIC website.

First Home Super Saver Scheme

Introduced in 2017, the First Home Super Saver scheme helps Aussies fast-track their homeownership dreams by utilising their superannuation fund.

Under the scheme, you will be able to make additional super contributions of up to $15,000 per year by sacrificing a portion of your salary. Once you have contributed $50,000 via the scheme, you can withdraw it from the super fund and put it towards a first home deposit. 

Couples can participate in the scheme, meaning they can save up individually and pool their money after withdrawing.

There are also considerable tax benefits available too. Before-tax contributions made by salary sacrificing will be taxed at 15% inside your super. And once you withdraw the funds, you will be taxed at your marginal income tax rate minus a 30% tax offset.

To be eligible for the First Home Super Saver, you must:

  • Be at least 18 years of age.
  • Have never owned property in Australia.
  • Have not previously received a FHSS payment.

Family Home Guarantee

Announced as part of the 2021-22 Federal Budget measures, the Family Home Guarantee lets eligible single parents purchase a home with a deposit of as little as 2%. The government aims to issue 10,000 guarantees over a period of four years. 

To be eligible for the Family Home Guarantee, you must:

  • Be a single parent with at least one dependent child.
  • Be an Australian citizen.
  • Be at least 18 years old.
  • Earn less than $125,000 per year.
  • Intend to be owner-occupier of the purchased property.
  • Not be a current property owner, though you can be a former property owner. 

The full list of participating lenders can be found on the NHFIC website.

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