Assistance available to First Home Owners

If you are purchasing your first home, then you may be entitled to the First Home Owner’s Grant (FHOG), a first home buyer duty exemption, concession or reduction, or the Homebuyer Fund.

First Home Owner’s Grant 

The First Home Owner’s Grant (FHOG) is a grant of $10,000 available to first home owners who purchase or build a new home in Victoria.

Eligibility Criteria

To receive the FHOG, there are a number of criteria that you, your new home, and your spouse/partner must meet, including that:

1. The value of your new home is less than $750,000
2. Your new home has not been previously occupied as a home or used for short-term accommodation, such as Airbnb
3. You are aged 18 years or older
4. One of the first home buyers is an Australian Citizen at the date of settlement for the purchase of the new home, or the date when the construction of the home is finished
5. Within 12 months of buying the home, one of the first home buyers will live in the home as their principal place of residence for a period of at least 12 months
6. You and your spouse/partner have not previously received the FHOG
7. You and your spouse/partner did not own a home in Australia prior to 1 July 2000
8. You and your spouse/partner have not lived in a home in Australia for a period of six months or longer which either of you owned or part-owned after 1 July 2000

You may still be eligible for the FHOG if you or your spouse/partner purchased a property in Australia after 1 July 2000 and you have not lived there as your home.

First Home Buyer Stamp Duty Exemption, Concession or Reduction

When you buy your home, you will likely be required to pay land transfer duty, also known as stamp duty. The amount of stamp duty payable will depend upon the value of the property, what you are using the property for, your Australian residency, and whether you are eligible for an exemption, concession or reduction.

You may be entitled to an exemption, concession or reduction even if you are not eligible for the FHOG, for example, if you are purchasing an established home or your partner has previously received the FHOG.

The exemption, concession and reduction are available to both new and established homes.

First Home Buyer’s Concession and Exemption

You may be able to access the first home buyer duty exemption or concession if you meet the following criteria:

1. You enter into a contract of sale to buy your first home on or after 1 July 2017
2. The dutiable value of your home is:
   • $600,000 or less to receive the first home buyer duty exemption
   • Between $600,001 and $750,000 to receive the first home buyer duty concession
3. All purchasers of the property meet the First Home Owner Grant eligibility criteria
4. Within 12 months of buying the property, one of the first home buyers will live in the home as their principal place of residence for a period of at least 12 months

First Home Buyer’s Reduction

The First Home Buyer’s reduction is a 50% reduction in the amount of stamp duty payable.

You may be eligible for the First Home Buyer’s reduction if you meet the following criteria:

1. You entered into a contract of sale to buy your first home before 1 July 2017
2. Your settlement date was on or after 1 September 2014
3. The contact price for your home is $750,000 or less
4. The dutiable value of your home is $600,000 or less
5. All purchasers of the property meet the First Home Owner Grant eligibility criteria
6. Within 12 months of buying the property, one of the first home buyers will live in the home as their principal place of residence for a period of at least 12 months

Homebuyer Fund

The Homebuyer Fund is a scheme where the Victorian Government will financially contribute up to 25%, or up to 35% for Aboriginal and Torres Strait Islander applicants, of the purchase price of your property in exchange for an equal percentage in ownership of the property.

For example, if the Victorian Government contribute 20% of the purchase price of the property, they will have a 20% share in your property.

You may be eligible for the Homebuyer Fund if you meet the following criteria:

1. The purchase price for your property is $950,000 or less in Metropolitan Melbourne or Geelong, or $600,000 or less in regional Victoria
2. The property is a residential property, such as a house, unit or apartment
3. You have saved a minimum deposit for your property price of at least 5%, or 3.5% for Aboriginal and Torres Strait Islander applicants
4. Your income is less than $130,485 per annum for individual applicants, or your combined income is less than $208,775 per annum for joint applicants
5. You are an Australian or New Zealand Citizen, or permanent Australian resident
6. You are at least 18 years of age at settlement
7. You do not have an interest in any land or any shares in a private company that owns land
8. You are not purchasing the property from a related person, such as a family member
9. You will reside in the property as your principal place of residence
10. You have an approved loan from a participating lender, and sufficient funds to pay all costs associated with the purchase

There are also ongoing obligations, including:

• Completing annual reviews to ensure your ongoing eligibility for the Homebuyer Fund
• Insuring your property
• Maintaining your property, including:
  • Making all council, body corporate, stamp duty and home loan payments on time
  • Keeping your property in good working order
  • Seeking approval before completing any renovations of more than $10,000
  • Seeking approval before refinancing or selling your property within two years of purchase

You will be required to start repaying the Victorian Government’s contribution to your property if any of the following occur:

1. Your annal income exceeds the threshold for two consecutive years
2. You receive a windfall gain of $10,000 or more, such as inheritance or a lottery win
3. You have made a mandatory payment and your income at the next reporting date has increased by 10% or more
4. You are approved by your lender to increase your home loan

If you sell the property before you pay back the Victorian Government’s share in the property, you will need to pay back their remaining share in your property. For example, if the Victorian Government still have a 10% share in your property, they will obtain 10% of the sale price of the property.

How can Coulter Legal help?

If you have any queries about your eligibility or would like to apply for the FHOG, Homebuyer Fund or a stamp duty exemption, concession or benefit, our Conveyancing team will be able to assist you.