First Home Owners Grant

Guide to the First Home Owners Grant

Making the decision to enter the property market is a big one, and not one you would have made lightly; as a responsible and diligent first home buyer you have carefully dissected your budget, open-mindedly weighed the importance of each loan feature and researched property values, median property prices and the assets of each area in which you are considering buying.

Featured First Home Buyers Home Loan

UBank UHomeLoan (Variable Rate) is exactly what you need for your first home or your first investment property. A low introductory interest rate with $0 ongoing fee.

• Interest Rate of 6.14%
• Comparison Rate of 6.14%
• Application Fee of $0
• Maximum LVR With LMI: 80%
• Minimum Borrowing: $100,000
• Maximum Borrowing: $1,000,000

Enquire about the UBank UHomeLoan (Variable Rate) terms and conditions

A smart first time buyer will look at the grants and assistance available as tools to help them compare home loans, because buyers who rely solely on government grants may not be financially ready for this monumental move, and are more likely to suffer when home loan interest rates rise, or their circumstances change.

Of course if there are grants and concessions available to you, you want to be able to take advantage of them – it can mean that you leave more of your savings in your emergency fund than in your home loans deposit, or you are able to provide less of a deposit, use the grants to cover lenders mortgage insurance, and use your savings for those renovations you would have had to put off.

Regardless of how you decide to utilise the first home owner benefits, you may be entitled to:

• The First Home Owners’ Grant
• First home owner bonuses in your state.
• First home owner concessions on stamp duty.
• The First Home Saver Account.

Grants and Concessions Available for Each State

Am I eligible for the First Home Owners’ Grant?

The First Home Owners’ Grant is a tax free lump sum payment of $7,000 paid by your state revenue office. The eligibility criteria for first home buyers differs slightly between the states and territories but generally, eligibility criteria includes:

• You must apply for the grant within 12 months of the completion of the construction of your home or the settlement of the property.
• You must be a first home buyer as a person, not as a company or trust.
• You or your spouse, partner or co-purchaser must not have previously owned an interest in land in Australia which had a residence on it, before 1 July 2000.
• You may still be eligible for a grant if you purchased an investment property or properties after 1 July 2000 as long as you have never owned a property before 1 July 2000 and didn’t live in the investment properties.
• You or your spouse, partner or co-purchaser may not have claimed the grant previously.
• If you are an owner builder you must have commenced building on or after 1 July 2000.
• To be eligible to home must be in Australia and can be a new or established house, a home unit, a flat or other type of self-contained fixed dwelling which can lawfully be used as a place of residence.
• You must occupy your first home as your principal place of residence within 12 months of the construction or purchase of your home and the minimum period of occupancy is six and continuous months.
• If you are applying for a grant with someone else who is also eligible only one payment of $7000 will be made.
• At least one applicant must be a permanent resident or Australian citizen.
• Each applicant must be at least 18 years old.

Featured Home Loans for First Home Buyers

Home Loan	Details	Interest Rate (p.a.)	Comp Rate^ (p.a.)	App Fee / Ongoing Fee	Max LVR	Min & Max Borrowing
State Custodians Mortgage Company Standard Variable Offset Loan	An award winning loan tailored to benefit the first home buyer.	6.22%	6.45%	$0 / $345	95%	$150,000 / $2,500,000
State Custodians Mortgage Company Breathe Easy Offset Loan	The Best Non Bank Basic Variable Loan of 2011	6.47%	6.36%	$0 / $0	95%	$150,000 / $1,000,000

Are there additional bonuses available in my State or Territory?

Depending on the state or territory in which you are buying or building your first time you may be eligible for first home buyer grants or bonuses in addition to the $7000 grant.

First home buyer incentives and conditions in the Northern Territory include:

• The first home owner concession scheme. The scheme offers first home buyers discount on stamp duty for the first $540,000 of the value of their property with a maximum concession capped at $26,730.
• Concessions available up to a certain property value. The first homeowner concession scheme in the Northern Territory is not means tested but is only available on properties up to the value of $750,000 and on vacant land up to the value of $385,000.

First home buyer incentives and conditions in New South Wales include:

• Property value threshold. From 1 January 2010 only properties valued at less than $750,000 will be eligible for the first-time owner Grant.
• First home buyers supplement. If you signed a building contract before 30 to June 2010 you may be eligible for the $3000 New South Wales new homebuyers supplement which is available on new properties or newly constructed properties which have never been lived in before. The supplement applies to newly built homes, contracts to build, off the plan purchases and owner builder constructions.
• First home plus. Provides first home buyers with exemptions for concessions on stamp duty and mortgage duty, where no duty is payable on homes valued less than $500,000 and concessions are available for properties valued between 500,000 and $600,000. Exemptions and concessions are also available for vacant blocks of land and no stamp duty is paid on land valued up to $300,000 and concessions are available for land value between $300,000 and $450,000.
• Eligibility for first home plus: the contract and the transfer must be for the purchase of the whole property; all purchases involved in the contract must be eligible and be a natural person no company or trust, be at least 18 years of age, have not at any time in all been a part owner of residential property in Australia or previously received an exemption or concession under the first home plus scheme; at least one purchaser must occupy the home as their principal place of residence for a continuous six-month period within 12 months of the completion of their contract.
• Partial eligibility for the first home plus scheme. If you are eligible for the first home plus scheme you are able to purchase a home with someone who is ineligible but still receive a concession on your portion of the property purchase. As the eligible purchaser you must buy at least 50% of the property and value limits apply.

State Custodians Mortgage Company Standard Variable Home Loan

Apply for State Custodians Mortgage Company Breathe Easy Loan and take advantage of a market-leading low interest rate with a bonus rate drop of 0.20% after 5 years. $0 Application fee.

• Interest Rate of 6.47%
• Comparison Rate of 6.69%
• Application Fee of $0
• Maximum LVR With LMI: 90%
• Minimum Borrowing: $150,000
• Maximum Borrowing: $1,000,000

Enquire about the State Custodians Mortgage Company Standard Variable Home Loan terms and conditions

First home buyer incentives and conditions in Queensland:

• Property value threshold. From 1 January 2010 only properties valued less than $1 million will be eligible for the first homeowner Grant.
• Stamp duty concessions. First home buyers will not pay any stamp duty on properties up to the value of $500,000 and for property’s value between 500,000 and $600,000 you will be eligible for exemption is calculated on a tiered basis. You can also qualify for stamp duty exemptions on land up to the value of $300,000.

First home buyer incentives and conditions in South Australia:

• No property value threshold. First home owners buying a property of any value in South Australia will be eligible for the full $7000 grant.
• A $4000 bonus. If you enter into a saleable building contract after visiting 2008 you can be eligible for an additional $4000 bonus. The value of the property must not exceed $400,000 to be eligible for the full $4000 bonus, but properties between $400,000 and $450,000 can be eligible for a portion of the bonus.
• New homes eligible for the bonus include: homes under a contract to build, off the plan purchases, owner builder properties and any home which is considered as a new residential premises for GST purposes.
• Tiered stamp duty concessions. You will not pay any stamp duty as a first-time buyer on properties valued up to $80,000 and there are tiered concessions for properties up to the value of $150,000.

First home buyer incentives and conditions in Tasmania:

• No property value threshold for the first homeowner Grant. There is no maximum value you can spend on your first home in Tasmania and regardless of the property value you will still be eligible for the full $7000 grant.
• Stamp duty concessions. You can receive a stamp duty concession of up to $4000 on established properties valued up to $350,000. The maximum stamp duty concession you can receive on the purchase of vacant land is 2400 for land up to the value of $175,000.

First home buyer incentives and conditions in Victoria:

• Property value threshold. First home buyers in Victoria will only be eligible for the first home owner Grant on properties valued up to $750,000.
• First home bonus for newly built properties. If you are building your first home you can be eligible for a $13,000 first time bonus from 1 July 2010 if you are building in the city. You can be eligible for a bonus of $19,500 if you are building in a regional area. The value of the property must not exceed $600,000.
• First home bonus for existing properties. If you purchase an existing home you can be eligible for a first home bonus of $2000.

First home buyer incentives and conditions in Western Australia:

• Property value threshold. From 1 January 2010 there will be limits on the total value of property which is eligible for the first-time owner Grant. Be available grant amount will be limited on properties with a total value of $750,000 or if the property is located in the township of Kalbarri or North of the 26^th parallel the limit is $1 million.
• A stamp duty concessions. You may be eligible for a concessional stamp duty rate if your first home is valued at less than $500,000 or you are purchasing land valued at less than $300,000.
• The homebuyer’s assistance account. The home buyer’s assistance account was established by and is administered by the Real Estate and Business Agents Supervisory Board in Western Australia. The account will provide first home buyers with a grant of up to $2000 to cover the incidental expenses associated with purchasing an established or partially built home using a licensed real estate agent. The purchase price of the property must be less than $400,000 and a submission for the grant must be received within 90 days of the contract being accepted.

First home buyer incentives and conditions in ACT:

• No property value threshold for the first home owner Grant. There is no maximum value on your first home if you are buying or building in the ACT and you can still be eligible for the full $7000 grant will stop
• Stamp duty concessions. In the ACT you may be eligible for Stamp duty concessions on a property which is valued at less than $330,000 based on your financial situation – your household income and the number of children who have.

How can I benefit from the first home Saver account?

Saving money for any goal can require dedication, control and perseverance which many of us can find lacking in ourselves – especially when the goal is so large as a home loan deposit, and so important. That is why the Australian Government introduced the First Home Saver Account in 2008 to make it easier for young Australians to build their home deposit by locking away the funds until you’re ready to purchase, and even offering government contribution incentives.

Benefits and features of the First Home Saver Account include:

• A savings account specifically for first home buyers. You can use any sort of high interest savings account or term deposit account to help you save for the money you need to cover the costs and the deposit for your first home, but you can get the most benefit out of a dedicated First Home Saver Account. The First Home Saver Account acts similarly to an ordinary savings account and is offered by a wide range of Australian banks and financial institutions.
• A four year term. Currently the First Home Saver Account must be kept open for four financial years before you can access the funds you have saved. This gives you an account with an interest rate which will rival many standard variable rates on high interest savings accounts, while also stopping you accessing your funds, in the vein of a term deposit account. At the same time you can still continue to make contributions from your wages to your account, unlike a fixed term deposit account.
• A lower tax rate and government assistance. Ordinarily the interest you earn on your savings is taxed depending on your current income tax bracket, however the interest on your First Home Saver Account is taxed at a low 15% and the financial institution who holds your account will pay this for you when you withdraw your funds. Plus, the government will contribute 17% of every dollar you contribute, each financial year, up to the first $5,000 of your contributions. This means you can earn up to $850 in government contributions each year.
• In a couple you can open more than one account. Unlike the First Home Owners’ Grant which is limited to one grant per property purchase, if you and your spouse, partner, family member or friend are purchasing your first property together, you can both open your own First Home Saver Account and reap twice the rewards.
• You cannot access your first home savings early. You have a 14 day cooling off period after opening a First Home Saver Account during which you can change your mind and withdraw your funds. After the cooling off period you cannot withdraw your savings or use them for any other purpose than to purchase your first home. If you do want to close the account, your savings will be transferred into your super fund, and you can’t access those funds again until your retirement.
• If your property purchase falls through. If you withdraw your savings and close your account to purchase your first home and the sale doesn’t go through, you can open a new First Home Saver Account within six months, and deposit your funds .

Eligibility for the First Home Saver Account:

• You must be between 18 and 65 years old.
• You must have a tax file number, and provide it on your account application.
• You must not have previously owned a property in Australia or on Norfolk Island which was your primary residence.
• You must not have already opened a First Home Saver Account, unless you closed your previous account within the 14 day cooling off period.

How do the 2010 Federal Budget changes to savings accounts affect my first home savings?

When the government announced changes to savings accounts in the 2010 budget, the First Home Saver Account was targeted as needing a makeover too. While the interest earnings, tax rate and government contributions were a good start, the restrictions on the amount of time the account must be kept open and how and when the money could be used, made the account less popular than was expected.

Changes announced which could affect the First Home Saver Account include:

• Tax charged on just half the interest. The Federal Government plans to discount the tax charged on all Australian savings accounts. Where the interest earned on a regular savings account was taxed at your marginal interest rate, and the interest earned on a First Home Saver Account was taxed at 15%, you will now only have to pay on half of the interest earned in a year. This means more of your funds going towards saving for a home, and you don’t have to wait for tax time to enjoy these savings, because you don’t have to pay the tax in the first place.
• Greater government contributions. The government contribution is set to rise by 10% and be paid on the first $5,500 each financial year, so you can potentially earn $935 in government contributions.
• Your savings don’t have to bypass your super. Previously, if you bought a home during the four years your account was opened, you couldn’t use the funds for the purchase, and they would be transferred to your superannuation account. However, now, if you purchase a home before the end of your four year First Home Saver Account term, at the end of the four years, the funds in your account will be transferred to your mortgage balance so you still benefit now, rather than at retirement.
• The account balance is capped at a higher $80,000. Previously your first home savings were capped at $75,000.

Yes, buying your first home is hard. Yes, saving for your first home deposit is a monumental task. However, while life can be a hard and expensive journey, you can make it easier and more affordable if you hold all the information. That is why Home Loan Finder have provided you this comprehensive guide to the First Home Owners’ Grant, and our First Home Buyers’ Guide, so that you can know there is an easier way. We’re not saying that buying your first home isn’t still going to be a lot of work, it will be, but the work will be made easier by the knowledge that you are getting what you are entitled to, you are getting the help you deserve and making your dream of owning your own home a reality, isn’t impossible.

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