What Is FHOG?

The first home owner grant has become the most commonly sought grant for first home buyers in Australia. The initiative, jointly funded by the federal and state government, provides these buyers with a one-off payment to help them buy or build their first home.

The first home owner grant is a great help for first-time home buyers because it gives them extra money to put towards their first home, where the hefty purchase price is quite often the biggest roadblock in one’s real estate journey. 

However, the success of the FHOG application depends on the first home buyer meeting all the eligibility criteria. Read this guide to understand the First Home Owner Grant in Australia and its application process to improve your chances of success.

First Home Owners Grant Eligibility

Before you apply for the first home owner grant, you need to check your eligibility. Otherwise, your application might get rejected, and you will waste time and effort.

There are a few conditions that you need to meet to be eligible:

• • You must be an Australian citizen or permanent resident, which means having a valid Australian passport or visa.
  • You must be over 18 years of age to apply for the grant.
  • You or your spouse must not have owned/ co-owned a residential property before. If you have owned a home in Australia before, you won’t be eligible for FHOG because the funding is only available for first-time home buyers.
  • You must be buying or building a new home. The grant is only available for people buying or building a new home by entering into a building contract. A new home is defined as a property that has not been built yet, or has been considerably renovated which means the grant can’t be used to buy an established home except in some cases and states.
  • You must use the property as your primary place of residence. You must also be using the property as your principal place of residence. You can’t use the grant to buy an investment property or a holiday home.
  • You or your spouse must not have received the First Home Owner Grant before.

It is also important to note that the grant can be used for various property types, including a stand alone house, a townhouse, an apartment or a unit in Australia. 

How Does the FHOG Work in Each State?

Besides the national conditions set by the Australian government, the first home owners grant eligibility requirements, and mode of operation also differ by state, as follows:

First Home Owners Grant VIC

The first home owners grant in Victoria is a one-time payment.

• The amount you receive: $10,000 for an urban home, or
• The amount you receive: $20,000 for regional homes
• Eligibility requirements: The property value mustn’t exceed $750,000 (the dutiable value of the property)
• Exemptions and Concessions: You may be exempt from paying stamp duty on your property if the dutiable value is less than $600,000.

If the dutiable value of your property is between $600,000 and $750,000, you will still receive stamp duty concessions.

First Home Owners Grant NSW

The First Home Owners Grant New South Wales is a one-time payment.

• The amount you receive: $10,000
• Eligibility requirements: The property value mustn’t exceed $650,000 (the dutiable value of the property)
• Exemptions and Concessions: You may be exempt from paying stamp duty on your property if the dutiable value is less than $650,000.

If the dutiable value of your property is between $650,000 and $800,000, you will still receive a concession on stamp duty.

First Home Owners Grant QLD

In Queensland, the FHOG is as follows.

• The amount you receive: $15,000
• Eligibility requirements: The property value mustn’t exceed $750,000 (the dutiable value of the property)
• Exemptions and Concessions: You may be exempt from paying stamp duty on your property if the dutiable value is less than $550,000.

If the dutiable value of your property is between $550,000 and $750,000, you will still receive a concession on stamp duty.

First Home Owners Grant WA

The eligibility for FHOG in Western Australia is as follows.

• The amount you receive: $10,000
• Eligibility requirements: The property value mustn’t exceed $750,000 (the dutiable value of the property)
• Exemptions and Concessions: You may be exempt from paying stamp duty on your property if the dutiable value is less than $530,000.

If the dutiable value of your property is between $530,000 and $750,000, you will still receive a concession on stamp duty.

First Home Owners Grant NT

The requirements for First Home Owner Grant in Northern Territory are:

• The amount you receive: $10,000
• Eligibility requirements: This amount is only available for individuals who want to buy a new home. Besides FHOG, you may be eligible for BuildBonus, an extra $5,000 if you buy or build a new home.

First Home Owners Grant SA

South Australia First Home Owner Grant requirements are as outlined below.

• The amount you receive: $15,000
• Eligibility requirements: The property value mustn’t exceed $575,000 (the dutiable value of the property)
• Exemptions and Concessions: You may be exempt from paying stamp duty on your property if the dutiable value is less than $500,000.

If the dutiable value of your property is between $500,000 and $575,000, you will still receive a concession on stamp duty.

First Home Owners Grant TAS

Tasmania has minimal requirements for FHOG eligibility, as follows.

• The amount you receive: $30,000 for new homes and off-the-plan purchases, or
• The amount you receive: $20,000 for existing homes
• Exemptions and Concessions: First-time home buyers of existing homes may be eligible for fifty percent (50%) off transfer duty on established homes with a dutiable value of $500,000 or less.

From the requirements above, you can see that most states have a maximum dutiable value of $750,000 for FHOG purposes. The only state that departs from this is Tasmania, which has a maximum dutiable value of $500,000 for established homes and $650,000 for new homes or off-the-plan purchases.

How to Apply for a First Home Owners Grant?

The application process for an FHOG starts with determining eligibility, gathering all necessary documents and evidence, and lodging the actual application.

The documents required for the FHOG vary from state to state, but generally speaking, you will need to provide:

• Proof of identity
• Residency and citizenship/ permanent residency status
• Proof of purchase or contract of sale for the property in question

There is also usually an application form that you should complete and lodge.

In most states, you can apply through your state’s housing authority or use a mortgage broker to apply on your behalf.

Banks and other financial institutions typically have staff specially trained to deal with FHOG applications, so they can be a good option if you want someone else to handle the process.

Once your application is lodged, the relevant State Revenue Office will assess it, and you should hear back within a few weeks about whether you have successfully received the grant. With this guide, you’ll understand the First Home Owners Grant well.

Remember to check the specific requirements for your state or territory, as they can vary slightly. And if you have any questions, feel free to ask a professional or consult with your lender.

When Does the FHOG Get Paid?

The FHOG can either be paid at settlement or in the first progress payment to the builder. The payment strategy depends on the reason for applying for the grant.

For established homes, the FHOG is generally paid at settlement upon completion of the property transaction, and you take ownership of the home.

For new homes or off-the-plan purchases, the FHOG is usually paid in the first progress payment to the builder. A progress payment is a partial payment made during construction before completion.

The timing of the FHOG payments can depend on a few different factors, such as:

• The type of home you are purchasing (established home vs. new home)
• Whether you are buying the home off-the-plan or not
• The terms of your building contract

In most cases, the FHOG is paid either at settlement or in the first progress payment.

Buy Your First Home

The First Home Owners Grant can be a helpful boost when buying your first home. As an eligible first home buyer, you should also have all the necessary documents ready to avoid rejections.

Additionally, you should understand the rules and conditions for your relevant state, which can be tricky. To ensure you have the best chance of receiving the grant, consult with an approved agent who can help you understand the conditions and apply on your behalf.

They can also advise on other first home buyer assistance programs available to you, improving your chances of being accepted for the FHOG while making use of other programs as well.

With this guide and the help of an approved agent, you should be well on your way to buying your first home.