The First Home Owner Grant Definitive Guide
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The First Home Owner Grant Definitive Guide
The First Home Owner Grant (FHOG, also known as the First Home Buyer Grant) in Western Australia is a payment provided by the State government to eligible first home buyers. It helps first home buyers get a deposit so that they can buy their own new residential home sooner.
It’s important to understand that the FHOG is only available for new homes, not for established homes or for home renovations.
How much is the First Home Owner Grant?
The FHOG is a one-off payment of $10,000. Only one FHOG payment can be made per eligible Western Australian property transaction. In other words, if a couple is buying a residential property together and they are both first home buyers, they are only eligible for a single $10,000 FHOG payment.
The FHOG will generally be paid at the contract settlement date if you’re buying a ready-built/turnkey new property, or when your slab is laid if you’re building a new home (for example, via a house and land package).
Who is eligible for the FHOG?
To qualify for the first home buyers grant (FHOG),you’ll need to meet all of the following requirements:
- be aged over 18,
- you (or your partner) must be an Australian citizen or a permanent resident,
- you (and your partner) must not have owned Australian residential property before, and
- you must intend to live in your new home for at least 6 months within
- 12 months of the home’s contract settlement date. In other words, you can’t be buying an investment property to rent out to tenants. If you are, you’re not eligible for the FHOG.
There are no income thresholds for the FHOG but if you’re buying in the Perth metropolitan area, then the value of your new home must be less than $750,000.
How do you qualify for the FHOG?
You can apply for the FHOG within 12 months of completing your new property purchase transaction via completing an application form and submitting it online to the Office of State Revenue. You’ll need to submit your building contract or contract of sale with your application form.
If you’re eligible for the FHOG, you’ll also potentially be eligible to be either exempt from government stamp duty on your home purchase or to pay a reduced amount. This stamp duty concession depends on the value of your home, but it could potentially save you thousands of dollars.
Recent changes to the FHOG
The FHOG was $15,000 for home buyers who entered into a building contract between 1 January and 30 June 2017. However, the construction of the home must also have commenced within 26 weeks of the building contract date and it must have been completed within 18 months.
These requirements mean that first home buyers are no longer eligible for a $15,000 FHOG payment. The current $10,000 FHOG payment is now the maximum available for all Western Australian new home buyers.
Can I use my super to buy my first home?
Yes, but only if you take advantage of the federal government’s First Home Super Saver (FHSS) Scheme. The FHSS scheme allows eligible first home buyers to make voluntary contributions to their superannuation fund to save for a deposit on their home.
It’s important to understand that these contributions must be additional to any compulsory super contributions made on your behalf by your employer. In other words, you can only withdraw super funds to buy your first home if you have voluntarily contributed funds to your super.
Superannuation is a tax-effective savings environment in Australia because super funds are taxed at the concessional rate of just 15%, which is lower than even the lowest marginal tax rate.
Normally, you can’t access your super until you have reached your preservation age (which is between the ages of 55 and 60, depending on your date of birth) and met a condition of release (such as retiring from the workforce). However, the FHSS allows you to access your super for a deposit on your first home.
You can apply to the Australian Taxation Office (ATO) have a maximum of $15,000 of your voluntary super contributions in any financial year included in your eligible FHSS contributions to be released. It’s possible to withdraw up to $30,000 worth of your voluntary contributions for a deposit on a home. For example, two years’ worth of the maximum annual $15,000 worth of contributions.
- be at least 18 years of age to be eligible to withdraw super funds under the FHSS.
- intend to live in the first home that you’re buying for at least 6 months in the first 12 months after you acquire it.
- buy an Australian property.
In addition, you must have never previously owned in property in Australia, nor have ever requested an FHSS release. Couples, siblings or friends can use their own eligible FHSS contributions to buy the same property.
There is a three-step process for accessing and using FHSS funds.
Step 1: apply to the ATO for an FHSS determination before signing a contract to buy your first home.
Step 2: once you receive your FHSS determination, apply to your super fund for the release of your ATO-approved funds. It may take between 15 and 25 business days for you to receive your FHSS funds.
Step 3: notify the ATO within 28 days of signing the contract to purchase your first home. Failure to do this will result in any FHSS funds that you have received being taxed at 20%.
How we can help
At Now Living, we specialise in providing affordable housing for first home buyers. We’ve helped more than 1,100 first home owners in WA to finance their property purchase over the last four years through The Loan Company, a mortgage broking service. The extensive range of new homes that we build start from just $269,000 and we can help you get started with a deposit of as little as 1,000!