There is no other feeling quite like the one you experience when it comes time to buy your first house. The overwhelming emotions are of course excitement and happiness and naturally a little trepidation seeing as the whole exercise is quite expensive. 

It’s hard work being a first home buyer. However, thanks to government initiatives like the First Home Owner Grant (FHOG), buying the perfect house is becoming more attainable for people from all backgrounds. 

Designed to ease the financial burden on aspiring homeowners, the FHOG is a great initiative. However, understanding the grant and how it can help your situation requires research. That’s why we’ve created this 2021 guide to the First Home Buyers Grant.

Defining the First Home Owner Grant 

Introduced by the federal government in 2000, the FHOG was designed to offset the effect of the GST on home ownership. Each Australian state has its own legislation and guidelines under which the FHOG operates. 

The FHOG for Victoria consists of a one-off, lump payment from the Victorian government to eligible individuals, couples and families. This payment varies depending on the location of the property you are looking to purchase.

For example, first home buyers looking to purchase properties in metro areas valued up to $750,000 are eligible for a $10,000 grant. However, an additional $10,000 is given to those looking to buy homes in regional Victoria that are valued up to $750,000. 

New legislation dictates that both new and established homebuyers in Victoria are also eligible for stamp duty exemptions or concessions. Those buying a property valued up to $600,000 as an owner occupier do not have to pay stamp duty. 

Understanding eligibility requirements 

When it comes to being eligible for the grant in Victoria, there are specific eligibility criteria that you must satisfy. These criteria include but are not limited to:

  • Must be over the age of 18.
  • By the time of settlement or date the property is ready to move into, you must be a citizen or resident of Australia.
  • You must intend to live in the home as a primary place of residence for 12 consecutive months, starting within the 12 months following settlement or completion of construction. 
  • The home cannot exceed the value of $750,000, regardless of location.
  • The home must be a new or substantially renovated property. 

Applying for the First Home Owner Grant 

In the majority of cases, the bank or credit union that is providing your finance will lodge the FHOG application form on your behalf. If you require the grant for settlement or first draw down/progress payment, you must lodge your application with an approved agent. However, if an approved agent is not lodging the application on your behalf, you need to submit the form to the State Revenue Office. 

Applying for the grant is an information heavy process. With this in mind, make sure that you read the lodgement guide before completing and submitting the form. When completing the form, gather the necessary supporting evidence such as Australian birth certificates and driver’s licenses, Medicare cards and marriage certificates, where applicable. Finally, lodge the application with the relevant approved agent or the State Revenue Office.

Buying your first home

The FHOG goes a long way towards helping individuals buy their first home. However, there is a lot more to buying a home than just securing the government grant. In fact, purchasing your first home should be the end result of comprehensive planning and research

When it’s time to buy your first home, break down the process into 4 key steps. This makes the home buying process seem less daunting, while also allowing you to gather the relevant information to make informed and responsible decisions.

Step 1: Working out what you can afford

Working out what you can afford involves an in-depth look into your finances to understand what you can realistically afford and what concessions or grants you are eligible for in order to ease the financial burden. 

Step 2: Saving for a deposit

By working out what you can afford and factoring in government grants, you will be able to work out how much you need to save. Factor in costs such as a deposit of 20% as this is the ideal amount as you won’t have to pay lender’s mortgage insurance. 

If you’re a first home buyer you may be exempt from paying stamp duty. You may be eligible if you meet the following requirements: 

  • You’ve entered into a contract of sale to buy your first home on or after 1 July 2017.
  • Your home has a dutiable value of either:
    • $600,000 or less to receive the first home buyer duty exemption, or
    • $600,001 to $750,000 to receive the first home buyer duty concession
  • All the purchasers of the property meet the First Home Owner Grant eligibility criteria, and at least one purchaser satisfies the residency requirement of living in the property for a continuous period of 12 months. 

You may also be eligible for the First Home Loan Deposit Scheme (FHLDS). To do so you must apply before June 30 2021. 1,800 FHLDS places were made available for the remainder of this financial year. As of 1 July 2021, another 10,000 FHLDS places will be available for the 2021/2022 financial year.

Step 3: Researching your future home

Attend property auctions and check the weekly auction results to see what properties in your price zone are selling for. This will give you a realistic picture of prices as compared to the condition of the property. 

Step 4: Getting ready to buy 

Once you have a realistic picture of property prices, start choosing service providers in terms or buyer’s agents or financial advisers, solicitors and conveyancers. This way, you can attend inspections and be ready to present the seller with a suitable, informed and responsible offer and hopefully secure your first home. 

Want to learn more about building in the Surf Coast and Bellarine? 

Our team at Levonix Homes have a wealth of building experience in the area. Building quality homes is our passion, so get in touch to learn more about building your dream home today.