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First Home Owners Grant

First Home Owners GrantOne of the biggest and most exciting steps in setting up your life in Australia is buying your first home. Planning is extremely important as there are many steps involved in the process; there is so much more involved in this process than simply coming up with the money for a deposit.

Most people who buy a property in Australia have to apply for a mortgage, also called a home loan. Lenders will usually expect a minimum deposit of five per cent of the value of the home. It is considered safer to have at least 10 per cent for your deposit, and having more than 20 per cent can exempt you from paying Lender’s Mortgage Insurance (LMI).

First Home Owner Grant (FHOG)

First-home buyers in Australia are eligible for a grants of $5,000 – $25,000 to assist with their purchase. The grant was established in 2000 to help offset the GST on house sales.

The grant is available to all Australian citizens and permanent residents. Under the conditions of the grant, at least one of the buyers must occupy the residence for a continuous period of six months during the first year after the grant has been paid. This is to prevent people from claiming the grant for investment properties. The maximum property value for eligibility depends upon the state or territory in which you live. Please note these figures may not be up to date if there have been changes made by a State or Territory.

Australian Capital Territory: $750,000

Queensland: $750,000

New South Wales: $835,000

Northern Territory: $750,000

South Australia:

Tasmania: no limit

Victoria: $750,000

Western Australia: $750,000 or $1,000,000 for property north of the 26th parallel

In addition to the federal First Home Owner Grant, each state and territory government has its own scheme to assist buyers of a first home. These range from savings on stamp duty to grants for the purchase of brand-new homes.

Further information on the FHOG and specific information for first-home buyers in each state and territory is available on the Mortgage Choice website.

You can also visit this governement site to see if you are eligible.

First Home Saver Account

The First Home Saver Account was set up by the Federal Government to get more people to start saving for their first home. The scheme is open to anyone aged 18 to 65 who is an Australian resident for tax purposes (part of the financial year) and has not previously owned a home that is their main residence. People who have owned an investment property in the past are still eligible to open an account.

First Home Saver Accounts can be opened at all the major banks and credit unions in Australia. Once you have opened the account, the government will pay you 17 per cent on top of the deposits you make, up to a maximum of $5,500. So if you contribute $3,000 in your first year, the government will pay you an extra $510.

You must you must pay a minimum of $1000 into the account every year, and the maximum balance allowed on the account is $85000, however, these amounts are indexed to keep up with inflation. If you choose to close the account and do not buy a home, you cannot access the funds until you reach 60 years of age. If you are under 60 the money will be transferred to your superannuation fund.

Our partner ANZ has savings and investment accounts designed to help you save for your first home along with tips and tools to help you along the way, find out more