First Home Grant - NEXT STEP FINANCING

Sahil Talwar
Feb 9
3 min read

The First Home Owner Grant (FHOG) is a national initiative in Australia, introduced on 1 July 2000, to assist first-time homebuyers in offsetting the impact of the Goods and Services Tax (GST) on home ownership. Funded by the federal government and administered by individual states and territories, the FHOG provides a one-off financial grant to eligible individuals purchasing or building their first home.

Eligibility Criteria:

While specific requirements can vary between states and territories, general eligibility criteria include:

Applicants must be individuals (not companies or trusts) aged 18 or older.
At least one applicant must be an Australian citizen or permanent resident.
Applicants and their spouses or partners should not have previously owned or co-owned a residential property in Australia that they occupied for six continuous months.
The property purchased or built must be intended as the primary place of residence for at least six continuous months within 12 months of settlement or construction completion.

It's important to note that each state and territory may have additional specific requirements and varying grant amounts.

State and Territory Specifics:

The FHOG varies across Australia, with each state and territory setting its own grant amounts, property value caps, and additional eligibility criteria. Here's a brief overview:

Victoria (VIC): Offers a grant for first-time buyers purchasing or building new homes. Additional benefits may be available for properties in regional areas.
New South Wales (NSW): Provides a grant for first home buyers purchasing new homes, including buying or building.
Queensland (QLD): Offers a grant aimed at first home buyers who are buying or building a new house, unit, or townhouse.
Western Australia (WA): Supports first home buyers purchasing or building a new home, with additional concessions for buyers in regional areas.
South Australia (SA): Provides up to $15,000 for the purchase or construction of a new home valued up to $650,000.

For detailed and up-to-date information, it's advisable to consult the revenue office or official government website of the respective state or territory where you intend to purchase or build your first home.

Additional Assistance Programs:

Beyond the FHOG, several other schemes and grants are available to assist first home buyers in Australia:

First Home Guarantee: Allows eligible home buyers to purchase a home with a deposit of as little as 5%, with the government guaranteeing up to 15% of the loan to avoid lenders mortgage insurance.
Regional First Home Buyer Guarantee: Supports eligible regional home buyers to purchase a new or existing home.
First Home Super Saver Scheme: Enables individuals to save for their first home inside their superannuation fund, benefiting from the concessional tax treatment of super contributions.
Stamp Duty Concessions: Many states offer stamp duty exemptions or concessions for first home buyers, which can significantly reduce the upfront costs associated with purchasing a property.

Considerations:

While these grants and schemes provide valuable assistance, it's essential to consider the broader implications:

Property Prices: Some critics argue that grants can contribute to increased property prices by boosting demand.
Eligibility Limitations: Certain grants are only applicable to new or substantially renovated homes, which may limit options for buyers preferring established properties.
Financial Preparedness: It's crucial to ensure that you're financially prepared for homeownership, considering all associated costs beyond the initial purchase price.

In conclusion, the First Home Owner Grant and associated schemes offer significant support to Australians aiming to enter the property market. However, it's vital to thoroughly research and understand the specific criteria and implications in your state or territory to make informed decisions aligned with your financial situation and homeownership goals.