The Commonwealth Government introduced the First Home Owners Grant (FHOG) on 1 July 2000 to offset the impact of the GST on home ownership by providing a grant to first homebuyers.
The grant is a one-off payment of $7,000 and will be payable to eligible first home owners. There are rules and conditions that must be satisfied in order to establish whether applicants are eligible. As a basic guide the applicant must be an Australian citizen and must be an individual or a couple purchasing or building their first home. Companies and trusts applicants are not eligible to claim the grant. A contract to purchase an existing property or to build a new home must be signed on or after 1 July 2000.
The FHOG is not means tested and is not limited to the purchase price of a property. However, if an applicant is living with a partner or a spouse in a domestic situation and either applicant has claimed the grant previously or has owned a property or owns a property than they will not qualify to receive the grant.
Purchasing vacant land does not qualify an applicant to receive the grant. However, applicants may still be eligible for the grant if they build a home (for owner occupation purpose) on the vacant land within the first 12 months of finalising construction.
The grant is usually paid at settlement of the property. The grant may also be claimed after settlement.
The FHOG is administered by the respective offices of state revenues and territories. Many financial institutions including banks help administer the FHOG as they are approved agents of such offices of state revenues. Banks can actually help process the application for the grant on behalf of the borrower and can arrange for the funds to be paid on the settlement date if required.
For more information relating to the FHOG please click here.