The First Home Owner Grant (FHOG) was introduced almost two decades ago and has been instrumental in helping many Australians buy their first home, when they previously may not have been able to afford one.
Many first home buyers become discouraged when they find a property they love, but haven’t done enough research or preparation, and discover too late that that they can’t afford it. Gaining a good understanding of the costs involved in buying your first home will help inform your choices where property is concerned. Expenses such as insurances, rates, body corporate fees, stamp duty, and GST all add up and can burst the bubble of even the most enthusiastic homebuyer.
Before making any big decisions about purchases, research your options and think about what you’re prepared to commit to financially. If you know how much finance would be available to you, based on your current and projected financial position (borrowing capacity), you can then meet with a preferred finance broker or advisor and discuss your eligibility for the FHOG.
The FHOG is a national scheme, offering a one-off opportunity to eligible home buyers, to reduce the initial outlay required to build or buy their first home. Grants are funded by individual states and territories and, as such, each state has their own eligibility criteria. The First Home Owner Grant website provides links to comprehensive information about each state’s eligibility and requirements for grant applicants.
There is considerable variation from state to state, however factors in common nationally include the requirements to purchase a newly constructed home or considerably renovated property (not an established home) and to reside in the property for 6 to 12 months in the first 12 months of ownership.
Different funding amounts are available depending on the type of property or land, and the value of it and when the purchase agreement was entered into. Depending on eligibility, grants range from $7,000 to $28,000 and a few states have introduced boosts of $5,000 dollars or more in recent years, or bonuses such as waiving stamp duty. Some states and territories also offer home buyer incentives in addition to the FHOG, for example $2,000 to allow for purchases of household goods and appliances or $10,000 for small-scale renovations to your property – such as a built in robe or an extension to your existing kitchen.
Once you have secured the FHOG and your finance, its time to contact a trusted agent to help you find a property that suits your needs and budget. Your agent should be able to listen to your needs and advise you whilst supporting your choices. A good agent will skilfully guide you with their experience and knowledge in areas you are unsure of.
Remember, the relationship you forge today with your agent could last a lifetime. Your agent can not only assist you with your first home purchase but also stand by you for future purchases and sales throughout your property investment lifespan.
Get advice from them about when is the best time for you to get into the market. They may know in advance about upcoming changes to the FHOG that will benefit you if you wait, or that you should take advantage of immediately. Look out for low interest rates, changing conditions in the market to your advantage and the best grant option for your circumstances. You’ll be moving into your very own first home before you know it.
For more information about grants available in your state, click here.
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DISCLAIMER
The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions. Click here for full Terms of Use.