Complete Explanation of the First Home Owners Grant

The First Home Buyers Grant is an Australian government grant which initially provided up to $21,000 for people purchasing a newly-constructed home for the first time and up to $14,000 for the first-time purchase of an existing home. However, the grant amount has now been reduced to a $7,000 payment to first time buyers in Australia who satisfy specific eligibility requirements. This grant was implemented by the government in an effort to accelerate the declining property market which has suffered as a result of the current global economic crises. Since this grant applies only to Australian residents, if an applicant isn’t a natural citizen, they must provide evidence of permanent residency and they must have resided in Australia for at least six months. Applicants do not have to pay taxes on this grant and they must be 18 years old to apply.

Stipulations Involved with this Grant

This grant is not a loan so the only way it would ever have to be repaid is if the applicants reneged on the contractual regulations and obligations. In addition to the owner, everyone else who will own or live in any part of the home must be included in the application process. No matter how many applicants there are in one household, there can be only one application submitted which names all relevant applicants and only one grant will be payable per application. When the applicant is buying or building a home, the best time to apply for the grant is in the beginning of the process. If it isn’t done at that time and applicants are still interested in applying, then when purchasing an existing home, the applicant must apply for the grant within one year of taking possession of the home and the title is registered. If the applicant is building the home, the application must be submitted within one year of the home being completed or when the final inspection report has been issued. If the application is being submitted after these deadlines, a written statement explaining the delay must be attached to the application in order for an extension to be considered.
 

The Office of State Revenue (the “OSR”) will process a completed application within 10 working days. If the applicants do not comply with the regulations of remaining in their homes as their principal place of residence for six months, then they will be expected to repay the grant in its entirety. Those who receive this money are free to spend it in whatever way they wish as there are no restrictions, limitations or guidelines dictating how the grant money should be spent. However, there are severe penalties up to $11,000 for making false or misleading statements and in addition to the financial penalty, the applicant may also be forced to repay the $7,000 grant money paid to them

Frequently Asked Questions

  1. What is the First Home Buyers Grant?
    The First Home Owner Grant is a $7,000 grant which was created and is provided by the Australian government to assist people who are building or buying their first home in Australia.
  2. When will I receive the payment?
    Payment of the grant depends on which office the applicant chooses to work with:
     
    Applying through an approved bank or lending institution:
    a) if the applicant is purchasing an existing home, the grant will be paid upon settlement of the purchasing process;
    b) if the applicant has a contract to build, the grant will be paid after the first progress payment is made provided it isn’t less than the grant amount; and
    c) if the applicant is the owner/builder, the grant money will be released upon receipt of the certificate of occupancy or completion of the home.
     
    Applying through the OSR:
    a) if the applicant is purchasing an existing home, the grant will be paid upon settlement of the process and the title has been registered in their name;
    b) if the applicant has a contract to build or they are the owner/builder, the grant will be paid upon completion of the home.
  3. How do I apply for the First Home Owners Grant?
    Applicants can apply for this grant at any approved bank or lending institution. They can also send their application directly to the OSR but the OSR advises that the application may be processed and approved more quickly if the applicant uses one of the approved banks or lending institutions.
     
  4. I owned a property many years ago — can I still get the grant?
    According to the OSR, to be eligible for this grant, applicants are allowed to have owned residential property in Australia prior to July 1, 2000. If buyers lived in residential property which they owned after July 1, 2000, they are not eligible for this grant.
  5. Do I also get concessions on stamp duty if I’m a first home owner?
    In some cases (but not all cases), some states offer concessions on stamp duty and possibly even exemption from stamp duty up to a certain level. Therefore, Applicants are advised to discuss this with their lender or lending institution when applying for the grant.
  6. Does the First Home Owners Grant count as assessable income for my tax return?
    No, the First Home Owners Grant is non-taxable.
  7. When will the First Home Owners Grant end?
    The First Home Owners Grant is an ongoing project which currently has no end date.
  8. What if I have owned a commercial property — does this disqualify me from the grant?
    As long as the commercial property was used totally for business purposes and never used, in whole or in part, as a residence, then applicants are free to apply for this grant.
  9. Can a company or a trust that is purchasing the property obtain the First Home Owners Grant?
    Generally speaking, a company or person acting as a trustee is not eligible to receive the First Home Owners Grant. However, there are special considerations for a trustee acting on behalf of individuals with legal disabilities who will reside in the home as their principal place of residence.
  10. Can I obtain the First Home Owners Grant if I want to purchase an investment property?
    No. The First Home Owners Grant is available only to people who intend to live in their home as their primary residence.
  11. Does my income or purchase price affect my eligibility for the First Home Owners Grant?
    An applicant’s income does not affect eligibility. There is no cap on the value of the property in certain states and the value varies in other states. Generally speaking, according to the OSR, as of January 1, 2010, the cost of the home to be purchased must be less than $750,000. This information is also something that should be discussed when speaking with the lender or lending institution.
  12. When do I have to occupy the property to satisfy the First Home Owners Grant requirements?
    The new owner must move into the home within one year after the property has been registered in their name. Then, the home must be the principal place of residence for the owner for six months thereafter.