First Home Buyers

Buying your first home is very exciting and is probably the biggest purchase you will ever make.


Buying your first home is a big step towards your financial security and is a very exciting time, we understand how confusing it can be to try and navigate your own way through the process.

We are here to help you take that big step. As a first home buyer, you probably have a million questions running through your head – how much do I need for a deposit? Do I qualify for a first home owner grant? What will be my monthly repayments? Do I want a fixed or variable loan? – The list is endless.

First Home Owner Grant

For contracts entered into on or after 1 July 2013, eligibility for the Grant will be limited to buyers of new homes.

For contracts entered into on or after 1 July 2013 to build or purchase a new home, a payment of up to $10,000 is available for eligible first home buyers. For contracts entered into prior to 1 July 2013, a payment of up to $7000 is payable to eligible first home buyers. This grant is not means-tested nor is it restricted by the price of the property for contracts entered into prior to 1 January 2010.

For contracts entered into on or after 1 January 2010, the grant will only be payable where the price of the property or construction of the home does not exceed $750,000. An exception to this requirement is where the contract relates to a home that is on, or to be built on, primary production land.

First Home Bonus

Please Note: The First Home Bonus ceased to apply for contracts entered into on or after 1 July 2012.
Please Note: The Regional Bonus ceased to apply for contracts entered into on or after 1 July 2012.
 

First Home Owner Boost

Please Note: The First Home Owner Boost ceased to apply for contracts entered into on or after 1 January 2010.

The table below sets out the different amounts that first home buyers in Victoria may be eligible for:

The information in these tables is to be used as a guide only.

Contract Date (1 July 2013 onwards)
Conditions First Home Owner Grant (FHOG) First Home Bonus First Home Owner Regional Bonus Total
Established homes only N/A N/A N/A N/A
Newly constructed homes in Metropolitan Victoria only $10,000# N/A N/A $10,000
Newly constructed homes in Regional Victoria only $10,000# N/A N/A $10,000
#To qualify for the Grant, the price of the property or construction of the home must not exceed $750,000.

 

Stamp Duty Concessions

In addition to the Grant, you may also be entitled to a stamp duty concessions. Stamp duty concessions have also undergone changes over the last year with the aim of encouraging home buyers into the market. The Queensland government offer $0 stamp duty on properties worth up to $500,000. And tiered concessions on properties valued up to $549,999.

The Victorian Government offers eligible first home buyers a duty reduction when they purchase a new or established home. The duty reduction applies where you buy a principal place of residence valued at not more than $600,000 and where the settlement date is on or after 1 July 2011.

Meeting the eligibility requirements for the First Home Owner Grant (FHOG), will entitle you to the duty reduction, however, you will not be entitled to the FHOG if you buy an established home and the contract date is on or after 1 July 2013.

Eligibility criteria for the duty reduction for both new and established homes includes that you must reside in the property for a continuous period of 12 months commencing within 12 months of settlement.

A 50 per cent duty reduction will be phased in over four years, with a 20 per cent reduction on 1 July 2011, followed by additional 10 per cent reductions on 1 January 2013, 1 July 2013 and 1 September 2014.

Duty savings to first home buyers
Value of Property Normal Rate of Stamp Duty (Principal Place of Residence) 20% Reduction – Duty Payable 20% Reduction – Saving 30% Reduction – Duty Payable 30% Reduction – Saving 40% Reduction – Duty Payable 40% Reduction – Saving
$200,000 $6,370 $5,096 $1,274 $4,459 $1,911 $3,822 $2,548
$300,000 $11,370 $9,096 $2,274 $7,959 $3,411 $6,822 $4,548
$400,000 $16,370 $13,096 $3,274 $11,459 $4,911 $9,822 $6,548
$500,000 $21,970 $17,576 $4,394 $15,379 $6,591 $13,182 $8,788
$565,000 $28,970 $23,176 $5,794 $20,279 $8,691 $17,382 $11,588
$600,000 $31,070 $24,856 $6,214 $21,749 $9,321 $18,642 $12,428

Eligibility

To be eligible for the FHOG, applicants must:

  • lodge a completed application and all supporting documents within 12 months of completion of the eligible transaction.
  • be a natural person (i.e. not a company), at least 18 years of age at the commencement of the eligible transaction.
  • ensure at least one applicant is an Australian citizen or a permanent resident at the time of completion of this application form.
  • entered into a contract of sale or agreement for the purchase of a new, established*, or off the plan home in Victoria; or
  • entered into a contract to build a home on their land in Victoria; or
  • in the case of owner builders, commenced construction (laying of foundations) of a home on their land in Victoria.
  • ensure each person holding a relevant interest in the home is an applicant.
  • ensure all applicants will reside in the home as their principal place of residence for a continuous period of at least six months commencing within 12 months of completion of the eligible transaction.
  • acquire a home that has a cap value that is less than $750,000
*Established homes will not be eligible for contracts entered into on or after 1 July 2013.

Applicants and their spouse/de facto partner must:

  • not have previously received a First Home Owner Grant in any state or territory of Australia. If a grant was received but later paid back together with any penalty, you may be entitled to reapply for the grant.
  • not have previously owned or held a relevant interest in residential property anywhere in Australia before 1 July 2000.
  • not have occupied residential property in which you acquired a relevant interest anywhere in Australia on or after 1 July 2000.

Pre Approved Loans

A Pre Approved loan is exactly that. It is completed like a formal loan with proof of income and deposit. While the general public may see most home loans as being similar there is a large variance in the policy requirement of each. For example, different ways to assess allowable income, net and gross, family assist, overtime, contract payments, rental income, depreciation etc can all give a different result to your application.

Even on deposits, some lenders see this as only cash in the bank where others will accept repayments of loans, assets in other investments, family loans etc as proof of savings.