The First Home Owner Grant (FHOG) was a scheme introduced in 2000 designed to make it easier for first home buyers to purchase their first property.
Currently in Western Australia, first time buyers building a new home are eligible to apply for a grant of up to $10,000, while those who opt to buy an established property will not be eligible to receive the grant. This was brought into effect on the 3rd October 2015. Previous to this date, first home buyers purchasing an established home also received a grant, however this is no longer the case.
Along with the funds granted to you (if eligible), there are also savings to be had on the stamp duty side of the purchase. With all property purchases the state government charges stamp duty and if you are a first home buyer and eligible, you can either have no stamp duty payable or receive a discount – this is based on the purchase price of the property as follows;
Established Properties –
Home – as of 3 July 2014
- To be eligible for the FHOR of duty, the unencumbered value of the home must not exceed $530,000.
- Where the dutiable value of the home does not exceed $430,000, no duty is payable.
- Where the dutiable value of the home exceeds $430,000 but does not exceed $530,000, duty is payable at a rate of $19.19 for every $100, or part of $100, by which the dutiable value exceeds $430,000.
Vacant Land
- To be eligible for the FHOR of duty, the unencumbered value of the vacant land must not exceed $400,000.
- Where the dutiable value of the land does not exceed $300,000, no duty is payable.
- Where the dutiable value of the land exceeds $300,000 but does not exceed $400,000, duty is payable at a rate of $13.01 for every $100, or part of $100, by which the dutiable value exceeds $300,000.
Note: The dutiable value threshold limits apply to the whole value of the home or vacant land being transferred, not to the value of the person’s interest in the property that is being transferred.
How to Apply for the FHOG
To apply for the FHOG, you must first complete the application form, which we can provide to you.
You can make an application once your purchase contract has been signed by all parties, and must be done within 12 months after possession of the property is confirmed.
You must present supporting documentation when applying for the FHOG. These include proof of your identity, particularly proof that at least one of the property owners is an Australian citizen. In addition, you must also provide documentary evidence of the eligible transaction, which in this case is a contract for the purchase a home.
Are You Eligible to Apply for the FHOG?
If you wish to apply for the FHOG, you must meet the Office of State Revenue’s eligibility criteria, which are as follows:
- You must be a ‘natural person,’ that is, an individual or a couple and not a company or a trust
- Both owners of the property must be at least 18 years old upon making the application
- One of the owners must be an Australian citizen or a permanent resident
- Neither of you must have availed of the FHOG in the past
- Neither of you must have owned a residential property anywhere in Australia before 1 July 2000
- Neither of you must have previously owned a residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence before 1 July 2004
- Neither of you must have previously owned a residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence for a continuous period of at least six months that began on or after 1 July 2004
- You must occupy the home as your principal place of residence for a continuous period of at least six months, starting within 12 months of completion of the eligible transaction
- You must have entered into an eligible transaction on or after 1 July 2000
- For eligible transactions commencing on or after 1 January 2010, the total value of the home must not exceed the cap amount of $750,000 if the property is located south of the 26th parallel of south latitude, or $1,000,000 if located north of the 26th parallel of south latitude.
If you would like to know more about the First Home Owners Grant or are a first home owner and would like to consider your options when taking out a loan, please send us an enquiry today.