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 $10,000. Those who opt to buy an established property will not be eligible to receive the grant however they will have access to a stamp duty concession as outlined below.
The state government charges stamp duty on all property purchases however if you are a first home buyer and eligible, you can either have stamp duty completely waived or receive a discount – this is based on the purchase price of the property. The government refers to the rebate as ‘First Home Owner Rate of Duty’
First Home Owner Rate of Duty – Thresholds & Eligibility
Home
- 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
- 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.
If you are applying for the first home owners grant and you are also applying for a home loan to purchase or build, the bank will process your application for you to ensure the funds are available at settlement.
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.
Now it’s time to take action and achieve your home owner goals! Remember, it’s all worth it and it’s all possible! 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, get in touch for a free consult with one of our expert brokers who specialise in this area. Call (08) 9367 4222, [email protected] or fill out the form on this page.