Article by Mozo
As real estate goes off across Australia’s major cities, which in turn lifts prices in the surrounding areas, trying to buy your first property in the current market is hard.
That’s why it’s important to look at all your options as a first home buyer, to see how you can get a foot in the door earlier. And of course one method is to purchase a home that fulfills the requirements of your state or territory's first home owners grant (FHOG).
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.
While originally the grant that offers a one-off lump sum to first timers was available for established properties, today all states require the property to be a “new” or “substantially” renovated home.
The FHOG differs according to the state or territory you live in with each region having its own criteria that you (and your partner) will need to meet to be eligible for the first home owners grant, such as being over the age of 18 and an Australian citizen or resident.
Here’s a quick run through of the different FHOG and concession schemes state by state.
So what are we waiting for? Let’s get started!
First home buyers across New South Wales who build or purchase a new home valued under $750,000 will receive a juicy lump sum of $15,000, (reducing to $10,000 on 1 January 2016) and could also avoid paying the hefty stamp duty tax that can run into the tens of thousands thanks to the New Home scheme. Keep in mind, you must live in the property for a set period of 6 months within the first year.
Just like NSW, Queensland offers a $15k one off payment, aptly named the Great Start Grant for new homes or even substantially renovated properties valued at less than $750,000. On top of this, there’s also a first home stamp duty concession, which means you will pay no stamp duty on the land if you meet the eligibility requirements. You will also need to move into your first home within the first year and live in it for at least 6 months.
Slightly less than NSW and Queensland, Canberrians can enjoy a $12,500 lump sum for new or substantially renovated properties valued at less than $750,000. And the home buyer concession means first home buyers purchasing or building a new property will pay stamp duty at a “concessional” rate. The ACT Government also requires you to live in the property for 12 months.
If you call South Australia home and are buying a new property as your first home then you’ll receive a lump sum of $15,000. While the stamp duty scheme for first home buyers that entitled you to a concession of up to $21 330 is no longer available, if you enter into a contract between 1 July 2014 and 30 June 2016, you will receive a “partial” stamp duty concession.
First home buyers living in the top end of Australia will be pleased to hear that they receive almost double what first home buyers in the the above states get, with a nice grant of $26,000 for new properties valued at less than $600,000. However, the downside is the stamp duty First Home Owner Concession (FHOC) was scrapped on the 4 December 2012.
Tasmanian first home buyers are entitled to a generous $20,000 lump sum if they meet the requirements of the First Home Builder Boost grant and purchase a new home. At the time of writing the grant had been extended by six months, from 1 July 2015 to 31 December 2015. You can check what the current offering is here.
Are you purchasing a new property in Victoria valued at less than $750,000? Then you could be eligible to receive a $10,000 lump sum and if your property is less than $600,000 you’ll receive a reduction on your stamp duty too.
The same $10,000 grant applies in WA for ‘new’ homes. There’s also a Home Buyers Assistance Account available to first home owners purchasing an older home costing less than $400,000 that provides a grant of up to $2,000 for some of the upfront expenses like pest and building inspection fees, conveyancer fees, and upfront home loan fees.
Before you decide that you’ll purchase a property to fulfil your state or territory’s requirements, make sure you follow these top tips:
Want more tips on purchasing your first property? Our first home buyers hub has everything you need, to make first home ownership a breeze.First time buyer guides