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First home owners grant: What is it and is it for you?

First home owners grant: What is it and is it for you?

First home owners grant: What is it and is it for you?

If you have ever looked at property, flicked through your TV and came across a property segment related or even been to a BBQ with friends talking about property, you have most likely heard the words “First home owners grant.” It’s spoken about a lot, it’s used in politics to win votes, and property newbies are using it all the time.

So, what is it and is it for you?

What is it?

The first home owners grant was introduced in the year 2000 and is a government grant that aims to help first home owners purchase property. It is a one-off payment for eligible first home buyers which has no relation to your income level.

In NSW, the scheme offers a grant of $10,000 (Each state is different, read through this article for all other states) to first home owners.

The scheme was implemented to:

1. Help offset the effects of GST on home buyers

2. Assist first home buyers get into the property market and start their portfolio

3. Encourage more construction of new homes

Awesome! Sign me up for $10,000

Unfortunately, it isn’t as simple as just being a first home buyer. To be eligible for the grant, there is a criterion that you and your desired property must meet to be eligible:

1. The property must be a new home that is being purchased, or the property must have been substantially renovated.

2. Value of home up to $600,000 or up to $750,000 if you are building the home (Includes value of land, if you are building)

3. You must be a permanent resident

4. You cannot have previously received the grant or purchased another property (this includes if you have only ever purchased investment properties)

5. You must be buying as an individual (Not a company or trust etc.)

6. The property being purchased must be to live in and not an investment.

Ok, that’s great… But what is considered as a new property?

The first home owners grant as mentioned above, is only available on brand new properties. So, what actually is brand new?

The NSW government defines brand new as:

· The first time the house has been sold and;

· A house which has never been lived in before you move in, including by the builder or a tenant.

In terms of homes that have been substantially renovated, the NSW government defines this as:

· Most or all of the house was removed or replaced

· This is the first time the home has been sold after those renovations

· It hasn’t been lived in since being renovated, including by the builder or a tenant.

I’ve found a property and it ticks all the boxes; how do I apply for the grant?

First home owners can apply for the grant through their financial institution or an approved agent such as a solicitor or conveyancer.

Is there any other financial help for first home buyers?

YES! You may be entitled to some more concessions and financial help through, ‘The First Home Buyers Assistance Scheme’ (FHBAS).

In NSW, the FHBAS allows first home buyers to purchase property up to the value of $650,000 without paying stamp duty (It’s just another tax). If the home is valued between $650,000 and $800,000 a concessional rate is applied.

First home owners also do not have to pay stamp duty on vacant land worth up to $350,000, and will only pay a concessional rate for land valued between $350,000 and $450,000.

Unlike the grant, the FHBAS also applies to purchasing existing homes.

Stamp duty can be in the tens of thousands of dollars, so this is another great scheme designed to help first time buyers save money and get onto the property ladder.

How can I calculate the stamp duty?

Stamp duty differs from state to state and they involve complex formulas, I’ve found a FREE app that will do it for you and much more in only seconds.

Property Calculator Australia APP can be found on both apple and android app stores.

Now that you know what the grants and concessions are, as well as whether you’re eligible, time to look for your first home! (And flaunt your new knowledge at the next BBQ too)

Grants and concessions available for each state breakdown

NSW

First home buyers grant

How much:

· $10,000 for property valued up to $600,000; or up to $750,000 if purchasing land to build (combined value of land and building).

FHBAS

How much:

· No stamp duty paid on property up to the value of $650,000.

· Concessional rates applied for values between $650,000 and $800,000.

VIC

First home buyers grant

How much:

· $10,000 for property valued up to $750,000 in metro Melbourne

· $20,000 for property valued up to $750,000 in regional Victoria

FHBAS

How much:

· No stamp duty paid on property up to the value of $600,000

· Concessional rates applied for values between $601,000 and $750,000

QLD

First home buyers grant

How much:

· $15,000 for property valued up to $750,000

FHBAS

How much:

· No stamp duty paid on property up to the value of $500,000 or vacant land less than $400,000

· Concessional rates applied for values between $500,000 and $550,000 on property

· Concessional rates applied for values between $400,00 and $450,000 on vacant land

WA

First home buyers grant

How much:

· $10,000 for property valued up to $750,000 (if property is located South of the 26th parallel of latitude)

· $10,000 for property valued up to $1,000,000 (if property is located North of the 26th parallel of latitude)

FHBAS

How much:

· Concessional rates applied for properties valued less than $530,000

· Concessional rates applied for vacant land valued less than $400,000

SA

First home buyers grant

How much:

· $15,000 for property valued up to $575,000

FHBAS

How much:

· No Exemptions

TAS

First home buyers grant

How much:

· $20,000 for new property, off the plan property or building a new home

NB. This amount will reduce to $10,000 from July 1 2020

FHBAS

How Much

· 50% discount on stamp duty for established homes valued at $400,000 or less

NT

First home buyers grant

How much:

· $10,000 for new property or building a new home

FHBAS

How much:

· Up to $18,601 off your stamp duty costs, available to first home owners buying a new or existing home, or building a home.

Kyrillos Mansour

What is an offset account? How can it help me?
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