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Jumping onto the property bandwagon is as exciting as it could be stressful. Especially with the rising property prices, getting a firm foothold on the property ladder isn’t easy. However, with much ado about housing affordability across the country, several states have taken the initiative of helping first home owners break into the property market by offering them plump first home owner grants.
 
First home buyer package Melbourne
 
In addition to the generous $20,000 grant sponsored by the Queensland government and the affordability package rolled out in NSW by the Berejiklian government, now home buyers in Victoria can also look forward to State-sponsored grants and concessions to help them on their property buying journey.


Making housing affordable in Victoria

The Guardian reported that the number of first home buyers in Victoria between July and October 2017 doubled to 4,355 as compared to 2,033 during the same period last year.

This boost to first buyer activity in the State could be attributed to a few fundamental reforms. These include the introduction of stamp duty exemptions and concessions as well as a grant of $20,000 for first home buyers in Regional Victoria.


What’s new?

Since 1 July 2017, first home buyers purchasing a new property valued up to $750,000 may be eligible for a grant of $10,000. Besides, those who decide to stay close to nature, purchasing their house in Regional Victoria, are rewarded with an additional $10,000 – boosting the deposit to a meaty $20,000.

For those buying an established home as their first home, you might still be eligible for duty exemption if the house is valued up to $600,000. The concessional rate of duty applies to properties valued between $600,001 and $750,000 (calculate your stamp duty here).


You can apply for FHOG if you are:

• At least 18 years old.
• An Australian citizen or permanent resident (In the case you are applying with a partner, at least one of the applicants must be an Australian citizen or permanent resident to qualify)
• Buying a new property that has never been occupied before

Besides, you must fulfil the following conditions:

• Neither of the applicants must have owned a property before
• You must not have received the first home owner grant in any other State
• You must move into the house within one year of the purchase and reside there for a continuous period of at least 12 months, failing which, you may be penalised.

Read more about the provisions here.


What kind of property can you buy?

To be eligible for FHOG in Victoria, you must purchase a new property that is valued up to $750,000. You can buy a house, a townhouse, an apartment or a unit as your first property but it should never have been occupied before. You can also purchase off-the-plan or take a house and land package.

However, if you decide to buy an established home, you can only access stamp duty concession but can no longer avail the first home owners grant.


When is the grant payment made?

The grant is paid at different times, depending on how you apply for the grant and the type of property you are buying. When you apply through a bank or a lending institution, you can expect the grant on the settlement date in case you are buying a new home. In the case of a construction loan, the grant will be received on the first drawdown of funds, which is usually when the slab for your home is placed. 

You can use FHOG as a part of the deposit when applying for a home loan, which is a big boost for buyers who have been struggling to save for a deposit. However, despite lucrative deals in the market and grants offered by various States, we suggest that you analyse your finances minutely before deciding to buy a house.

Often, the amount that the lenders offer you is different from the amount you can service comfortably. Especially if you are a first home buyer, it is more important to consider how much you ‘should’ borrow than what you can borrow.

If you intend to purchase a home, start by creating a good household budget to see how much money you can apply towards your mortgage repayments each month.

Remember, you can only avail the first home owner grant once. Thus, it is important to make an educated decision rather than rushing into a purchase you cannot afford to make. Speaking to a mortgage broker could help you understand your situation better.


How to apply for FHOG

To apply for the first home owner grant, you may lodge your application through your mortgage broker or download the application form and lodge it yourself after the sale process is complete. Apart from the application, you would also be required to submit other paperwork including the proof of your identity and the contract of sale. Alternately, you could directly apply through your lender as well.

We advise that you are completely honest while applying for the first home owner grant. The applications are heavily scrutinised, and incorrect information could lead to rejection of your application as well as additional penalties and fines.

Remember that the FHOG approval process is stringent and time-bound, and one must not lose the benefit simply out of confusion or shying away from taking professional help. Mortgage brokers at HashChing have helped many first home buyers like you purchase their first property with significant savings on their home loans. Read Susan’s story to know more.


At HashChing, we have helped hundreds of first home buyers purchase their dream home.  Our mortgage brokers provide you most professional guidance, apart from competitive home loan deals from across Australia.

Once you get in touch, an expert will assess your eligibility for FHOG, lodging the application on your behalf, with all the supporting paperwork, promptly, which will save you time and hassle, ensuring you receive the funds in time.

You can learn more about FHOG in different States here.

 

By Vidhu Bajaj,
HashChing Content Writer

 

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