Buying Your First Home? The 'First Home Owner Grant'
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| Buying Your First Home? |
The Australian property market is tough. In Sydney, Brisbane, and Melbourne, median house prices have hit record highs, making the "Great Australian Dream" feel impossible for young people.
But before you give up, you need to know about the thousands of dollars in "free money" the government is offering to get you on the property ladder.
It comes in two forms: The Cash Grant and The Tax Break. And surprisingly, the tax break is often worth much more.
1. The Cash: First Home Owner Grant (FHOG)
This is a one-off payment from your State Government. The catch? In most states, it is strictly for NEW homes (building a house or buying a brand-new apartment that no one has lived in).
- NSW: $10,000 (New homes up to $600k or building up to $750k).
- Victoria: $10,000 (New homes up to $750k).
- Queensland: $15,000 to $30,000 (New homes up to $750k). *Note: The $30k boost is a temporary measure; check the current QLD Revenue Office expiry date.
- WA: $10,000 (New homes).
2. The Real Gold: Stamp Duty Concessions
Many first home buyers obsess over the $10,000 grant but ignore Stamp Duty (Transfer Duty). This is a huge mistake.
Stamp Duty is a state tax usually costing 3-4% of the property value. On a $700,000 home, that is nearly $25,000 to $30,000.
The Good News: Most states offer full or partial exemptions for first home buyers, even for EXISTING (Old) homes.
💰 Example: The NSW & VIC Advantage
- NSW (FHBAS): You pay $0 Stamp Duty on existing homes up to $800,000. (This was increased from $650k).
- Victoria: You pay $0 Stamp Duty on homes up to $600,000, with discounts up to $750,000.
- The Saving: This exemption alone can save you over $31,000 upfront. That is 3x better than the cash grant!
The "Residence Requirement" Trap
To get these benefits, you cannot just buy the house and rent it out immediately.
- The Rule: You must move into the property within 12 months of settlement.
- The Duration: You must live there continuously for at least 6 to 12 months (depending on your state).
Warning: State Revenue Offices use sophisticated data matching (tracking electricity usage, bond data, and postal addresses). If they find out you rented it out on Airbnb instead of living there, they will demand the money back with heavy penalties.
Bonus Tip: The 5% Deposit Scheme
Aside from grants, ask your broker about the Federal Government's First Home Guarantee (FHBG). This allows you to buy a home with just a 5% deposit without paying Lenders Mortgage Insurance (LMI), potentially saving you another $15,000.
Start Your Property Journey Smartly
Don't just look at the price tag of a house. Look at the incentives.
If you are eligible, the combination of the FHOG, Stamp Duty exemptions, and the Federal Deposit Scheme can effectively lower your entry cost by $30,000 to $50,000. Talk to a mortgage broker to see exactly what you can claim in your state.
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