What is the First Home Owners Grant and when are you eligible?

The First Home Owners Grant (FHOG) was introduced on 1 July 2000 as a way to offset the impact GST would have on homebuyers. It's a national scheme funded and administered by the States and Territories, and administered under their applicable legislation. So what exactly is the FHOG? Conveyancing Buddy gives you what you need to know.

First Home Owners Grant: What is it?

FHOG is a one-off grant of up to $7000 aimed to help fund the first time purchase of a home. The grant is not means tested, is not taxed and does not have to be repaid.

The main requirement for eligibility is that the purchasers of the property do not have any interests in property prior to 1 July 2000, even if it was only an investment property, owned in part or in full. In addition, at least one of the purchasers must be an Australian permanent resident or citizen.

The scheme also has residential requirements. For homebuyers, at least one of the purchasers must move into the property within the first 12 months, and live there for at least six months consecutively. However, there are few restrictions on renting out the property during the first 12 months, as long as you take up residence some time before that period is up, after which it's possible to rent out rooms as long as it doesn't impinge on your ability to use it as your main residence.

How do I apply for the First Home Owners Grant?

Each State has its own office that funds and administers the program (see our list below). You can apply either through the applicable office, or with the help of an approved agent.

In addition to FHOG, you may also be eligible for the First Home Plus Scheme, which provides concessions or exemptions on transfers for those who are purchasing a new home.

For houses up to $500,000, a full exemption could apply, and a concession for houses which have a value between $500,000 and $600,000. Vacant land with a value of up to $300,000 attracts the exemption, while land with a value between $300,000 and $450,000 will attract a concession.

You can find specific details on this scheme in your state, and other information, via the various state administrative offices:

• New South Wales on 02 9685 2187
• Victoria on 13 2161
• Queensland on 1300 300 118
• Western Australia on 1300 363 211
• South Australia on 08 8226 3750
• Tasmania on 03 6233 3744
• Australian Capital Territory on 02 6207 0032
• Northern Territory on 08 8999 7949

Each state office also has a list of approved agents to make this process easier. If applying through an agent, the grant will be available for settlement, or if building, on the first draw down on contracts to build.

Generally, applications can only be directly submitted to the state office if you have completed the sale and you are registered on the title, but this may vary from state to state. In most cases, applications must be made within the first 12 months of settlement. If in doubt, get professional conveyancing advice by seeking a certified conveyancer or solicitor in your local area.