Buying your first home? The Australian Government provides the First Home Buyers Grant, also known as First Home Owner’s Grant, (FHOG) to encourage people who might not otherwise have the funds, to buy their first home.

Introduced as a way to counteract the adverse effects of the Goods and Services Tax (GST) on home ownership, the FHOG varies from state to state in Australia, offering a range of financial benefits designed to make the dream of homeownership a reality for first-timers.

Each state and territory has tailored the grant to suit its residents, meaning eligibility criteria and the amount of assistance provided can differ greatly depending on where you plan to buy your home.

By providing this grant, the Government aims to make home ownership much more attainable for younger people and alleviate the financial stresses often associated with being a first home buyer in Australia in 2024.

If you plan to be a first home buyer in Australia in 2024, this article is for you!

When Is a Good Time to Buy Your First Home?

A “good time” to buy your first home is when interest rates are low. However, according to research, that might not be any time soon. As such, with high interest rates and high inflation, construction industry issues and other factors, you might want to wait a bit longer to buy. Or, considering the market is unpredictable, if you’re prepared, there’s no reason you shouldn’t buy in 2024.

The average age of first-home buyers in Australia is 36, with regional variations in Tasmania at 32.7 and 38.7 in Western Australia. However, many factors can affect your decision to get on the property ladder and buy your first home in Australia.

What You Need to Know as a First Home Buyer

Whether you’re having a custom home built, or you’re planning a knockdown rebuild, it’s important to have all of the information that you need relating to the finances involved in buying a home. Here’s what you need to know about the FHOG.

Not Everyone is Eligible for the First Homeowner’s Grant

Although the grant is a federal program, it is administered at the state level. As such, each state has its own set of eligibility requirements and provides slightly different funding levels. To answer, “How do I qualify for the first home buyer’s grant?” check your regional government’s requirements.

Who is entitled to first home buyer’s grants in Australia?

A few basic requirements are the same across all states and territories to qualify for the first home buyer’s grant in Australia. These are:

●     You must be buying or building your first home, or buying a home that requires significant renovations.

●     You must be over the age of 18.

●     You must be an Australian citizen or Permanent Resident.

●     You cannot have previously owned property in Australia.

If you meet these general requirements, there’s a good chance that your state or territorial government will approve your application for a first home buyer’s grant.

But what about our easterly neighbours, New Zealand? Can Kiwis get the first home buyer’s grant in Australia? Yes! If you’re not an Australian citizen, or Permanent Resident, but are living in Australia on a Subclass 444 Visa, you should be eligible for the FHOG, provided you meet the other requirements.

How Much Could I Receive Under the FHOG?

If you’re wondering how much is the first home buyer’s grant in Australia, here’s a brief overview (though figures can change so check your local government before you apply):

●     New South Wales: $10,000 for new homes valued at less than $600,000 or land to build a new home valued at less than $750,000.

●     Victoria: $10,000 for new homes in metropolitan areas; $20,000 for homes in regional Victoria.

●     Queensland: $15,000 for buying or building a new home valued at less than $750,000.

●     Western Australia: $10,000 for homes worth up to $750,000 south of the 26th parallel.

●     South Australia: $15,000 for constructing or purchasing a brand new property.

●     Northern Territory: $10,000 for first home buyers purchasing or building a new home.

Do I Have to Pay Stamp Duty under the FHOG?

It generally depends on how much you’ll pay for your new home and how your state or territory administers the FHOG. Some will still require you to pay stamp duty, while others offer exemptions or programs that exempt you from paying stamp duty.

How To Apply as a First Home Buyer?

You must apply to your state or territorial government to receive the first home buyer’s grant. In the vast majority of cases, the bank or mortgage lender offering to finance your new home will make an application on your behalf. In any case, the FHOG must be launched by an Approved Agent of the relevant revenue agency in your state or territory.

Different states and territories have slightly different application requirements, but you must complete the following steps as a general guideline.

1. Check Eligibility: Research the specific eligibility criteria for the First Home Owner Grant (FHOG) and any additional concessions in your state or territory.
   
   
2. Gather Documents: Collect necessary documents such as proof of identity, income verification, and contract of sale.
   
   
3. Choose How to Apply: Decide whether to apply through your lender (as an approved agent) or directly through your state or territory’s revenue office.
   
   
4. Apply for a Mortgage: If needed, begin your loan application process, informing your lender of your intention to apply for the FHOG.
   
   
5. Submit Your Application: Complete and submit your FHOG application via your chosen method.
   
   
6. Wait for Approval: Your application will be reviewed after submission. The grant is typically paid at settlement if applied through a lender or after settlement if applied directly.

Tips from the Experts for First-Home Buyers

Here are a few expert tips for purchasing your first home.

Start saving for your deposit

You won’t be able to purchase anything unless you have enough to put down a deposit. Under the first home buyer’s grant, you only need a 5% deposit. Use that to your advantage and start saving now.

Start shopping around for homes

Once you’ve worked out your housing requirements and desires (2 bedroom, 3 bedroom, number of bathrooms, etc.), it’s time to start shopping around for your home. Remember that any purchases made through the FHOG must meet certain requirements to qualify.

Buy when interest rates are low

Unfortunately, due to the state of the construction industry and the general economy, interest rates aren’t set to come down anytime soon. If you’re purchasing during the next 12 months or so, it’s worth shopping around and seeing which mortgage lender or bank will give you the best interest rate.

Don’t be afraid to negotiate

While this may be a little tricker for custom builds, as most often, the set price is the set price, you can negotiate with vendors selling homes that require substantial renovations and still qualify for the FHOG. Don’t be afraid to negotiate. You never know what people will accept for their house until you ask.

Final Thoughts

 

The first home buyer’s grant in Australia in 2024 is still one of the best options for those looking to save money when buying their first home. Whether you’re buying a custom home or are looking to salvage an old fixer-upper of a house, the FHOG is the perfect tool to get your foot on the property ladder.

 

If you’re looking for a custom home or a house-and-land package, give Provincial Homes a call today and let us help you get started on your home ownership journey, with a little help from the First Home Owner’s Grant.

 

Frequently Asked Questions       

 

How much do you get with the first home buyers grant in Australia?     

The First Home Owner Grant (FHOG) in Australia offers varying amounts up to $10,000 to $15,000 for eligible first-time buyers, depending on the state or territory.

Does the Australian government help with first time home buyers?     

Yes, the Australian government assists first-time home buyers through various schemes and grants including the First Home Owner Grant (FHOG) and the First Home Guarantee.

What is the first home buyer deposit scheme in Australia?

The First Home Buyer Deposit Scheme in Australia allows eligible first-time buyers to purchase a home with as little as a 5% deposit without needing to pay Lenders Mortgage Insurance (LMI), supported by Housing Australia.