The First Home Owners Grant (FHOG): What Is It and Are You Eligible?

Housing affordability used to be a huge problem, particularly for first home buyers in Western Australia – but not anymore. The trick is to learn about government schemes and incentives that may help ease the issues in purchasing or building a new house.

If you have not previously bought a house or land before, you may be eligible for the First Home Owners Grant.

What Is the First Home Owners Grant?

One thing that stops people from buying their first home is the total expense involved in the task. But don’t let the cost deter you from becoming a homeowner. With just a bit of research, you will find government support that enables you to save some cash. One such program is the First Home Owners Grant. As the name suggests, it is targeted towards first homeowners, meaning individuals who have not purchased a home or land in the past.

Each state has different offers to first home buyers. If you’re in Western Australia, you can get $10,000 for buying or building a new house. There are, of course, certain limitations and conditions that you need to know about. You cannot simply use the grant to pay for any home you want to buy or build.

The location and value of the home will be considered for you to be eligible for the First Home Owners Grant. For example, suppose you are in the south of the 26th parallel (i.e., the Perth metropolitan area). In that case, you can only apply for the grant if the home you will purchase or construct does not exceed $750,000. This particular value should already cover the land and the building expenses.

Meanwhile, if your dream home is located north of the 26th parallel, you will only be eligible for the grant if the property is worth $1 million or less.

Are You Eligible for the First Home Owner Grant in WA?

Before you can claim your First Home Owners Grant, you need to meet the conditions stated below:

• You should be an individual looking to purchase or build a home. Therefore, companies or businesses are not qualified.
• You should be of legal age (18 years or older) at the time you lodge your application. You can still apply if you are under 18 if you get approved for an exemption from this age requirement.
• If you are a couple applying for the First Home Owners Grant, at least one of you must be a permanent resident or an Australian citizen. Both you and your spouse or partner should be applying for the grant for the first time.
• You should be willing to live in the home you have purchased or constructed for at least six months within 12 months of completing the buying or construction process.

Apart from the rules above, some things can cancel your eligibility for the grant. For example, if you have already owned a residential property anywhere in the country before 1 July 2000, you cannot apply for the First Home Owners Grant. You will also be ineligible if you have a residential property on or before the said date and you have lived there before 1 July 2004 or at least six months on or before this date.

Do You Know About the Home Buyers Assistance Account?

Apart from the the First Home Owners Grant of $10,000, you may also be able to claim the Home Buyers Assistance Account worth $2,000. This incentive is offered to first home buyers so that they can reimburse certain expenses that come with buying a home.

You may already know that the purchasing process does not just involve paying for the land and home, but also fees, such as conveyancing, solicitor, inspection, valuation, and establishment charges. You also have other payments to make, including mortgage insurance premiums and loan fees that you should give to the lender up front when taking out a home loan.

So, how can you get this extra $2,000? Home Buyers Assistance Account in WA requires you to pay up to $400,000 for your new home. Another requirement is that you should only purchase the house from a licenced real estate agent working in the state.

Lastly, you can claim the fund if the first home is either built or partly built when you purchase it. That means you will not be qualified if you plan to build a house yourself.

What About Buying an Established Home?

Unfortunately, the First Home Owner Grant WA does not cover buyers of an established home. But here is the good news. You may still be eligible to claim stamp duty discounts, which apply to qualified individuals, as well.

Meanwhile, if you purchase vacant land where you plan to build your first home, you never have to worry about stamp duty payments. However, you should not pay more than $300,000 for the land. If the cost is between $300,000 and $400,000, you can still enjoy a reduced rate. For example, if it costs you $350,000, you can save about $4,230 on stamp duty.

Homes costing $430,000 and below will exempt you from stamp duty costs. However, if it exceeds this amount up to $530,000, you can still enjoy a reduced rate. Let us say that the new house is worth $450,000. Your stamp duty will be around $3,838, giving you more than $11,000 worth of savings. All stamp duty concessions in WA are removed if your first home costs more than $530,000.

How to Apply

Are you ready to apply for the First Home Owner Grant in WA? Contact our team and we’ll help you apply.