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What is a First Home Owner Grant?

İlk evlerini almak isteyen çiftler için devlet yardımları son derece yartarlı olabilir. Source: E+

Buying a property is not easy, but the First Home Owner Grant could help you get a foot in the door earlier.

Almost 20 years ago, Australia launched a national scheme to boost the economy and assist people in buying their first home. Under the scheme, first home buyers who purchase or build a new residential property to live in, receive a grant.

The First Home Owner Grant (FHOG) is administered by the states and territories. They all have different criteria and offer different amounts of money, varying from $7000 in the Australian Capital Territory to $26 000 in the Northern Territory.

Moving in
new apartment selfie time
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Guarav Vaishnava, who has migrated from India with his family, says it’s a welcome subsidy.

“We were on a tight budget, and we were looking for a house we could get with a buyer grant. We were paying over two thousand dollars per month in rent so we were lucky that we got a house near Rooty Hill and it was a townhouse and it was nicely built.”

Are you eligible?

The FHOG only applies to new homes and apartments that have never been lived in. 

While it’s not means-tested (meaning it’s not based on your income), it only covers the purchase of a home up to a certain price limit. Some states, like Victoria, also offer a higher FHOG if your home is in a regional area.

Building site
Construction managers planning while standing in messy site
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To be eligible for the grant, applicants have to be over the age of 18 and Australian citizens or permanent residents.

Recipients of the FHOG are usually required to live in the property they bought for a period of at least six consecutive months after the purchase.

“You have to live in it for a period of six months within 12 months. So, you can rent it out for the first six months after settlement and then you have to live in it for six months after that, all within the 12 months after settlement,” explains Sonia Akra, who works in a legal firm in Parramatta.

Family looking at new home to purchase.
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Considering the prices of properties in Australia, the FHOG might not always seem like a lot of money, but Melbourne real estate agent Raghad Misho believes it’s a good start.

“Even though it’s not a large amount of money, it does help a bit,” he says.

How to apply?

There are two ways of applying for the FHOG: either by lodging the application personally through a relevant state authority or by asking the home loan provider to lodge the application.

Homeownership project
Homeownership project
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The grant is usually paid to the lender at the time of settlement and can be used to reduce the home loan or added to the deposit, which has to be saved up to purchase a property in the first place.

Other benefits

In the end, Vaishnava missed out on receiving the FHOG because the value of his new home rose above the NSW price limit for the grant.  “We missed out but we got stamp duty exemption because the property was less than six-hundred-and-fifty-thousand dollars,” he says.

To find out more about the FHOG in your state and other benefits you could receive, visit