Conversations with a Pug – First Home Owner’s Grant Victoria |

Conversations with a Pug – First Home Owner’s Grant Victoria

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First Home Owner’s Grant Victoria

 

The housing market might seem unreachable, especially for those who have never owned property before. Thankfully, the Australian government created home owner grants in 2000 to help first time buyers with the process.

The First Home Owners Grant (FHOG) offers Aussies a one-time lump sum of money to first time home owners that are going to buy a new or heavily renovated home.

Depending on the state or territory you are in, the requirements for this grant change, along with the amount of money you may receive. The FHOG is available almost everywhere in Australia, and if you reside somewhere that isn’t Victoria you can check the FHOG requirements of the other states at the bottom of this article.

How much is the first home owner’s grant in VIC?

If you purchase a property in Victoria valued less than $750,000, then you are eligible to receive $10,000 through the FHOG. You also may get a discount on your stamp duty.

The grant may change in the future as the state sets its annual budget. There are even occasions where they offer more money. Previously, Victoria offered a $20,000 FHOG for new homes bought in regional Victoria. However this offer ended in June 2021 and there has not been any announcements of renewing or extending this offer.

New home owners get paid the grant once the purchase transaction of the property is complete. In some cases you can even use the grant as part of your deposit when you are buying property (not land). However, double check the policies with your lender first before assuming that you can use the FHOG towards your deposit.

Who is eligible for the first home owner’s grant in VIC?

To become eligible for the FHOG in Victoria, you and the ones you are buying property with need to be purchasing residential property for the first time. The property you purchase must be your main residence for a minimum of 12 continuous months within the year of settlement or construction completion. Australian Defence Force members who are on active duty or leave that are enrolled to vote in Victoria are exempt from this rule.

Other requirements:

  • Be an Australian resident or citizens of at least 18 years of age
  • Not received FHOG in any other state or territory
  • Not owned property in Australia before 1 July 2000
  • Not lived in a house that you owned or partly-owned after 1 July 2000 for at least six months
  • Complete all official FHOG documents.

If you fail to maintain the residency requirements for at least 12 continuous months then you will be required to repay the grant back to the state.

Note: You may still be eligible for the grant if you or your partner purchased property on or after 1 July 2000 and did not live on the premises as your main residence. Also your spouse/partner must be in the FHOG application even if they will not be on the property’s title.

How to apply for the first home owner’s grant in VIC?

Before applying you need to decide if you are applying directly to the State Revenue Office or through your lender. Depending on who you apply with will determine when you’ll receive your payment.

Applying through your lender:

  • 100 points of ID evidence
    Application form
    Supporting documents for your eligibility
    Provide evidence contract of sale, dated and signed by all parties
    Give documents to your lender to lodge.

The money will be paid to you on the day of settlement for the new home. If you are building your home then the payment will be paid when building work commences—usually when the home’s foundations have been built.

Applying through the State Revenue Office

  • 100 points of ID evidence
  • Application form
  • Supporting documents for your eligibility
  • Provide evidence contract of sale, dated and signed by all parties
  • Mail it to the office ( State Revenue Office, GPO Box 1641, Melbourne, VIC 3001).

The grant will typically be paid to your account within 10 working days after receiving the application.

What other grants or schemes are available in VIC?

If you are buying an established property as your first home and meet the FHOG eligibility requirements (minus the new home part), you may receive a first-home buyer duty exemption. This is only for homes valued at $600,000 or less. If your future home is valued at $600,001 up to $750,000 you may receive a concession.

There is also the New Home Guarantee which was previously known as the First Home Loan Deposit Scheme. Every year the New Home Guarantee gives federal government support to buy a home to the first 10,000 home buyers that apply. Through this scheme new home owners can qualify for home loans as little as 5% LVR without paying for LMI. This scheme is only available from select lenders with price caps, availability and only for new homes.

If you’re a single parent you may qualify for the Family Home Guarantee. It allows 2,500 single parents per year to qualify for 2% deposits without having to pay LMI. This recently introduced scheme is for previous owner-occupiers and new home buyers.

Finally, there is the First Home Super Saver Scheme which allows first time home buyers to use their super to save up for a deposit. Through this scheme, you can sacrifice up to $15,000 of your salary per year towards the scheme. By doing this you receive a discounted tax rate of 15% and your funds can earn a specific rate of return. When you are ready to buy your house you can withdraw the money (and the earnings) to use for your deposit. Generally this scheme is more tax-effective than saving through a traditional bank account, but it tends to be one of the less popular scheme options.

 

Source: Maria Gil

 

My Very Best To You Always,

 

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