Are you eligible for the First Home Owner Grant in Victoria?

More first home buyers are entering the market in Victoria thanks to the State Government’s increased assistance in 2017.

First home buyers are now eligible to receive a First Home Owner Grant of up to $20,000, as well as additional stamp duty concessions to help them make their purchase.

But there are some conditions that have to be met before a home buyer can apply for the grant, so it’s important you’ve done your research and know what you’re eligible for.

Designed with the first home buyer in mind, Porter Davis’ Fernbrook house doesn’t compromise on style, nor on functionality. Picture supplied

Eligibility criteria for First Home Owner Grant

A perfect storm of rising living costs, slow wage growth and increasing house prices means that getting a foot on the property ladder is harder than ever. But it’s not impossible, and there’s help at hand.

Recognising the difficulty faced by many first-time buyers, the Victorian Government recently increased the amount of its First Home Owners Grant to $10,000 for people buying in Melbourne and $20,000 for people buying in regional Victoria. (To check if your potential home qualifies for the larger grant, the State Revenue Office of Victoria, which administers the FHOG, has a list of eligible council areas.)

Of course, as the name suggests, the grant is only available to first-time homeowners. And you aren’t entitled to the FHOG if you or your spouse/partner have previously:

• received a first-home owner grant in Australia
• owned a home or other residential property in Australia, either jointly or separately, before 1 July 2000 (though you may be still be eligible for the FHOG if you bought a property on, or after, 1 July 2000 but have not lived there as your home)
• occupied, for a continuous period of at least six months, a home which either of you owned or part-owned on or after 1 July 2000 in Australia.

To be eligible, for the First Home Owner Grant, at least one of the applicants must also:

1. Intend to live in the home as their principal place of residence (PPR) for at least 12 continuous months, starting within 12 months of settlement or completion of construction;
2. Be aged 18 or over (discretionary);
3. Be an Australian citizen or permanent resident, either by the date of settlement (for an established home), or by the date the building is ready for occupation (in the case of entering into a comprehensive building contract).

Be sure to check that you qualify as first homeowners. Picture: Getty

What sort of house are you buying?

The grant is only available to buyers who buy or build a new home, up to the value of $750,000. A new home can be a house, townhouse or apartment.

For the purposes of the FHOG, the definition of a ‘new’ home also extends to existing property that is being sold as a residential premises for the first time; house and land packages; and vacant land on which you plan to build a new home.

Be sure to check that your property is classified as a new home. Picture: Eugene Hyland

Do you have to pay back the First Home Owners Grant?

No. You will only be asked to pay back the grant if you are later found to have not met the eligibility criteria.

In these circumstances, you may also face substantial penalties if you are found to have acted dishonestly.

New homes in regional Victoria may be eligible for a grant of up to $20,000. Picture: Getty.

How should you apply for it?

Most banks will organise and process the First Home Owner Grant application on your behalf.

However, it is very important that you are very clear about what you are entitled to before you buy your home. You should seek professional advice tailored to your individual circumstances. More information can also be found here.

How long does it take to receive the First Home Owner Grant?

The time you have to wait to receive the grant depends on whether you are building a new home or buying one, and whether you are applying through an approved agent or through the SRO.

 1. Buying a new or off-the-plan home

• • If you use an approved agent to lodge the application, you will receive the grant on the settlement date.
  • If you apply through the SRO, your application will only be reviewed after the settlement. If there are no issues, it will be paid into your nominated EFT account within 10 working days.

2. If you are entering into a contract to build or you are an owner-builder

• • If you use an approved agent to lodge the application, you will receive the grant on the date of the first progressive payment.
  • If you apply through the SRO, your application will only be reviewed after issue of the Certificate of Occupancy. If there are no issues, it will be paid into your nominated EFT account within 10 working days.

3. If you are entering into a terms contract

• • These applications must be submitted directly to the SRO.
  • Your application will only be considered after you have provided evidence of possession. After then, if there are no issues, your grant will be paid into your nominated EFT account within 10 working days.

Other concessions

There are several other concessions available to first home buyers in Victoria.

First home buyers won’t have to pay stamp duty for new or established homes bought for $600,000 or less – which can mean a saving of over $31,000 for a $600,000 house.

There are also smaller stamp duty concessions for homes purchased between $600,000 and $750,000, and for off-the-plan home purchases.