First Home Owners Grant (FHOG)
The hardest part of the property buying process is getting a deposit together. With skyrocketing rents around the country, including Queensland, the state government has introduced a First Home Owners Grant to help you get onto the ladder faster.
In addition to the state based scheme which allows first home buyers up to $15,000, the federal government introduced the First Home Loan Deposit Scheme which provides up to $20,000.
Of course each of these grants are subject to conditions and eligibility criteria.
How much is the FHOG worth?
The First Home Owner Grant Scheme in Queensland has a current value of $15,000 and can be used towards the cost of building a new home. The federal government also has a scheme called the First Home Loan Deposit Scheme which helps those with small deposits buy their first home.
What is the eligibility criteria?
To qualify for the First Home Owner Grant you must meet the following criteria. You must be:
- Buying a new home. A new home is defined as a home that hasn’t been lived in or sold previously and the total combined value of the home and land must be lower than $750,000. Some existing properties are eligible as long as they have been renovated, refurbished or altered so drastically that the living space is completely different.
- Over 18 years of age.
- An Australian citizen, a permanent resident or be a joint applicant with one of the above. New Zealanders on the special category visa may be eligible.
- A first home buyer. That is to say that you cannot have owned a home previously.
- A first time applicant.
While the criteria is pretty strict there are some exceptions where applicants with special circumstances may be eligible. If you think you are eligible then talk to one of our mortgage brokers so you can get started on the process.
How do I apply?
You will need to fill out a First Home Owner Grant application form. If you would like help doing so please get in touch with us.
What do I need to apply?
To apply for the First Home Owner’s Grant you will need to go to the Queensland Treasury website and fill out the application form. You will need to supply the following as proof of ID:
- 100 points (Driver’s license, domestic or foreign passport, birth certificate etc).
- Secondary ID such as your Medicare card and proof of your address like a bank statement or other bill.
- A copy of your construction contract if you are buying vacant land.
- A list of completed renovations if you purchased an existing property and renovated it.
Does the grant count towards the deposit?
Yes. You can use the First Home Owner’s Grant towards the deposit. In some cases the First Home Owner’s Grant is not paid out until the transaction is finalised so there are some situations where you will need to pay the money upfront for the deposit. It will depend on the lender that you get a home loan with. Some lenders will be happy to accept proof of eligibility for the grant as a sufficient guarantee that you have the means to pay for the deposit but others will not. We can provide you with more information on what different lenders may be looking for from first home owners.
Can I buy land?
No. The First Home Owner’s Grant cannot be used for land.
Can I get the First Home Owner’s Grant for an existing home?
No. Generally the grant is only for first home owners who are building a new property. There are limited circumstances where the First Home Owner’s Grant will be paid out for existing homes, but again, it will be subject to the conditions of the home and whether or not substantial alterations have been made.
Can permanent residents get the FHOG?
Yes. In many cases permanent residents of Australia qualify for the First Home Owner’s Grant provided they meet all other lending criteria. Queensland residents on a temporary visa are not eligible for the First Home Owner’s Grant.
Can I get the First Home Owner’s Grant if I’m married?
Yes. Provided both you and your spouse meet the criteria you can get the First Home Owner’s Grant.
Can I get the grant twice?
No. The First Home Owner’s Grant is only for first home owners . That applies to single and joint applicants. Even if you have sold the property that was purchased using a First Home Owner’s Grant you are not eligible. If you have used the First Home Owner’s Grant to build your own home then you cannot apply for a subsequent grant if you sell that home and want to buy another.
Do I have to pay stamp duty if I’m an FHB?
First home buyers do not pay full stamp duty regardless of whether or not they get the First Home Owner’s Grant. This applies to new builds, existing dwellings and land purchases where the buyer intends to purchase a new property.
You will not pay stamp duty at all if the property you are purchasing is below $500,000. If the property costs more than this you will be required to pay stamp duty regardless of whether you’re buying your first or subsequent home. Full stamp duty relief only applies on land where the purchasing price is lower than $250,000.
How long before it will be paid?
It depends on the nature of the transaction.
If you are buying a new home from a developer than the grant is paid when the transaction is finalised.
If you are building your own property the grant will be paid as soon as construction has taken place.
What other options do I have?
Queensland first home buyers can also use the Family Home Guarantee which aims to help 5,000 solo parents each financial year secure a home loan with a deposit of only 2% without the requirement to pay Lender’s Mortgage Insurance (LMI). This scheme is available to anyone regardless of if they are purchasing a first or subsequent home and the maximum annual income is $125,000 with a loan lasting for no more than 30 years.
There is also the Regional first Home Guarantee which is the same as the First Home Guarantee which is designed to help first home buyers secure property in regional Australia. Up to 10,000 guarantees each year are available with a deposit of as low as 5% without having the added cost of LMI.
The First Home Super Saver Scheme allows you to sacrifice up to $15,000 of your salary each year towards the FHSSS. The maximum amount you can have released as part of this scheme is $50,000.
If you would like more information or help applying for any of the schemes get in touch with one of our brokers and we would be happy to help.
