First Home Buyers

Buying your own home for the first time can be exciting and challenging, with a whole range of financial issues to consider.  First among them will be the type of loan you can qualify for, considering your current financial position and any government assistance that you may be eligible for.  There are also a multitude of options you will need to consider, from fixed or variable loans, to redraw facilities and offset accounts.  It can be confusing at first, and the more research you can undertake, the better you will be prepared to make the right decisions for the security of your financial future.

WHO IS CONSIDERED TO BE A FIRST TIME HOME BUYER?

Essentially a first home buyer is someone who has never purchased a property as their own home.  Banks and other lenders generally offer special loans for first time home buyers, and the Government offers a First Home Owners Grant (FHOG) to help people trying to get into the market, and in competition with investors and those who are more established as property owners.

WHAT IS THE FIRST TIME HOME BUYER’S GRANT?

The FHOG was first introduced in 2000 as a way to help those trying to get into the property market offset the cost of the GST, and is generally considered to be a way to save on what can be the expensive cost of stamp duty when purchasing a home.

Every state and territory has differing rules for who is eligible for the grant, as well as factors such as the maximum price of the property, how much the grant will cover, the type of property you can purchase with help from the grant and the types of incentives offered.  For example, in NSW the Government refined the rules for the FHOG in 2017, with changes including:

  • All homes worth $650,000 or less will be exempt from stamp duty
  • Lender’s mortgage insurance will now incur no insurance duty
  • People who wish to build their own new home valued up to $750,000 or those wanting to purchase a new home worth $600,000 or less receive a $10,000 First Home Grant

Generally speaking, you must live in the property as your own home for at least six months to be eligible for the FHOG.  Because the requirements as well as the benefits of the grant can be complex, it’s important to talk to your home loan specialist to ensure you take advantage of any Government incentives on offer to make your journey onto the property ladder as smooth as possible.

FIRST HOME BUYERS GRANT SUMMARY

Below is a summary of the First Home Owners Grant offerings in each state and territory in Australia: