The First Home Buyer Grant (FHBG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation. Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria.
Buying your first home is a major financial decision so it’s important to understand your financial responsibilities and what help and money is available to you Before you buy your first home in Melbourne or Victoria, here are some essential facts you need to know regarding the FHBG.
You can receive up to $10,000 with the FHOG
If you are buying or building a new home valued up to $750,000, you may be eligible for the First Home Owners Grant (FHOG). A $20,000 FHOG for regional areas may also apply.
You may pay stamp duty on your purchase
When you buy your home, you'll most likely have to pay land transfer duty (otherwise known as stamp duty). How much you pay depends on your property's value, what you're using it for, if you are a foreign purchaser, and whether you are eligible for any exemptions or concessions.
There are exemptions and concessions for Stamp Duty
You may be eligible for – and receive – more than one exemption, concession or reduction from stamp duty for your property. In Victoria, these include:
First home buyer duty exemption or concession – a one-off duty exemption for a Principal Place of Residence (PPR) valued up to $600,000, or a concession for a PPR with a dutiable value from $600,001 to $750,000
As the ongoing owner of a property in Melbourne or Victoria, you may also have to pay various annual taxes and levies. For example, from 1 January 2017, a 1.5 per cent absentee owner surcharge on land tax will apply to Victorian land owned by an absentee owner.
ARE YOU ELIGIBLE FOR THE FHOG?
If you are buying or building a new home, you may be eligible for the FHOG (First Home Owners Grant Melbourne)or FHBG(of up to $10,000) if you signed your contract on or after 1 July 2013. A $20,000 FHOG for regional areas may also apply.
Your new home can be a house, townhouse, apartment, unit or similar, but it must be valued at $750,000 or less and be the first sale of the property as a residential premises. You’re not eligible for the FHOG or FHBG if you or your spouse or partner have already:
Received the FHOG in Australia,
Owned a home in Australia, either jointly or separately, prior to 1 July 2000,
Lived in a home in Australia in which either of you owned or part-owned on or after 1 July 2000, for a continuous period of at least six months
These criteria apply even if your spouse/partner is not an applicant with you for the FHOG.
All FHOG applicants must be at least 18 at settlement or completion of construction (although there is discretion with this age requirement),
You (or at least one applicant) must be an Australian citizen or permanent resident at the time of settlement or completion of the home’s construction, and
You (or at least one applicant) must intend to live in the home as your PPR for at least 12 months, commencing within 12 months of settlement or completion of construction
New Zealanders holding a special category visa under s32 of the Migration Act 1958 and anyone holding a permanent visa under s30(1), are considered to be a permanent resident of Australia. To be eligible, NZ citizens must be in Australia at the time of settlement.
Established homes are no longer eligible to receive the FHOG. However, if you are buying an established home as your first home and you meet the FHOG or FHBG eligibility criteria (but for the fact that it is not a new home), you may be entitled to:
First-home buyer duty a one-off duty exemption for a Principal Place of Residence (PPR) valued up to $600,000, or a concession for a PPR with a dutiable value from $600,001 to $750,000, and/or
For contracts signed prior to 1 July 2013, a FHOG of up to $7000 is still available for eligible applicants if you bought an established home.