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What Government grants and assistance is available to assist eligible first home buyers buy their first homes in WA?

 

  1. First Home Owner Grant (FHOG)
  2. First Home Owner Rate of Duty (FHOR)
  3. Home Buyers Assistance Account (HBAA)

 

First Home Owner Grant [1]

The most well-known grant is WA is the First Home Owner Grant (FHOG). This is a government grant that is offered by the Government of Western Australia to eligible first home buyers. (See Eligibility Criteria below)

The FHOG is currently: $10,000 (for ‘new homes’ only)

Unfortunately, if you are thinking of buying an established property, there is no FHOG available. But don’t despair – you may still be eligible for the following assistance.

 

First Home Owner Rate of Duty [2]

If you meet the eligibility criteria required for the FHOG you could be entitled to the First Home Owner Rate of Duty (FHOR). The good thing is – this is available for new homes and established property purchases.

When purchasing a property, the purchasers are required to pay ‘Stamp Duty’, which can be very costly. The FHOR entitles eligible applicants to a duty concession rate. There are 2 thresholds which should be considered when searching for a property

If the purchase price of your property (new or established) is $430,000 or less eligible applicants pay $0 Stamp Duty. That is a saving of $14,440.

However, if the purchase price of your property (new or established) is less than $530,000 you are still eligible for FHOR but it is minimal. For a property worth $500,000 the FHOR would mean the Stamp Duty payable would be $13,433, which is a saving of $4,332.

 

Home Buyers Assistance Account [3]

The Home Buyers Assistance Account (HBAA) is a grant of up to $2,000 available to first home buyers when they purchase an established or partially built home through a licensed real estate agent.

The maximum purchase price criteria for the HBAA is $400,000.

So whilst you may miss out on the FHOG if buying an established property, you may still be eligible for the HBAA.

 

Eligibility criteria [4]

To be eligible for the FHOG, applications must satisfy the following eligibility criteria:

  • Each applicant must be a natural person (i.e. not a company or trust)
  • Each applicant must be 18 years of age or over at the date of making an application.
  • At least one of the applicants must be an Australian citizen or permanent resident at the date of making an application.
  • Each applicant and/or their spouse4 cannot have previously received a FHOG or FHOR of duty under this scheme.
  • Each applicant and/or their spouse cannot have owned residential property anywhere in Australia before 1 July 2000.
  • Each applicant and/or their spouse cannot have previously owned residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence before 1 July 2004.
  • Each applicant and/or their spouse cannot have previously owned residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence for a continuous period of at least six months that began on or after 1 July 2004.
  • Each applicant must occupy the home as their principal place of residence for a continuous period of at least six months, commencing within twelve months of completion of the eligible transaction. § Each applicant must have entered into an eligible transaction on or after 1 July 2000. An eligible transaction is defined under section 14 of the First Home Owner Grant Act 2000, but is generally a contract for the purchase or construction of a home, or commencement of construction of a home as an owner builder.
  • For eligible transactions commencing on or after 1 January 2010, the total value of the home must not exceed the cap amount. The cap amount is:
  • $750,000 if the property is located south of the 26th parallel of south latitude, or
  • $1,000,000 if located north of the 26th parallel of south latitude.

Residence Requirement

To be eligible for the FHOG and FHOR of duty, each applicant must occupy the home as their principal place of residence for a continuous period of at least six months, commencing within twelve months of completion of the eligible transaction.

If you are unable to satisfy the residence requirement you must notify the Commissioner in writing. Where you can clearly demonstrate good reasons for being unable to satisfy the residence requirements, that are unforeseen or beyond your control, the Commissioner may consider a written application to:

  • reduce the time you are required to live in the home to a period of less than six months;
  • extend the time allowed for you to commence residing in the home to a period of longer than twelve months; or
  • where there are two or more joint applicants, exempt an applicant from the residence requirement

As you can see, there is a lot of information to decipher when purchasing a property – particularly your first!

 

So how can Empowered Finance assist you?

  • We provide you knowledge and access to a large range of finance providers to ensure you get the right loan for you
  • We mentor you throughout the purchase of your property to ensure you minimise the cost to yourself – in terms of both financial and time. This includes assisting with dealing with real estate agents, settlement agents and assisting with applications for grants.
  • We have your best interests at heart and will give you honest professional advice
  • Our service is complimentary – as we are paid by lenders.

If you are considering purchasing your first home and would like more information please subscribe to our newsletter, Like our Facebook page or email [email protected]

 

Sources:

[1] https://www.finance.wa.gov.au/cms/uploadedFiles/_State_Revenue/FHOG/FHOG-Guide.pdf

[2] https://www.finance.wa.gov.au/cms/uploadedFiles/_State_Revenue/Duties/First_Home_Owner_Rate_Of_Duty.pdf

[3] http://www.housing.wa.gov.au/housingoptions/homeownershipoptions/FirstHomeBuyers/REBA/Pages/default.aspx

[4] https://www.finance.wa.gov.au/cms/uploadedFiles/_State_Revenue/FHOG/FHOG_Fact_Sheet.pdf

 

Disclaimer:

Whilst every care has been taken to ensure the accuracy of the information presented in this article, the author will not be held liable for any loss, damage, cost or expense incurred by you as a result of any inaccuracies, errors or omission. Please refer to sources for full information.

Information correct as at 5th April 2016.

The information contained is general advice only. If you would like personal advice, taking into account your circumstances, please contact us at [email protected]

Matthew Pow is a credit representative (CRN 470902) of BLSSA Pty Ltd (ACL 391237).