First Home Owner

First Home Owners Grant (FHOG) - Helps You Get Into The Property Market!!

By admin ⋅ March 19, 2008 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

Are you currently thinking about entering the property market?? Well, buying your first property is definitely the most difficult!! The other day on the news I heard that average house prices in Sydney are amongst the most expensive in the world!! So how on earth are we supposed to purchase our first property when prices are so high? It seems so daunting that we probably have to save, save, save for years only come up with a deposit, and only then be able to afford a small shoe-box of an apartment!! Luckily, the Government has a subsidy called the ‘First Home Owners Grant’ (FHOG) to help us out!!

the FHOG is great incentive to get into the property market!!

How Much $$ is the First Home Owners Grant?

The First Home Owners Grant is there to assist in the purchase of a first home. In New South Wales the Grant is $7,000 and first home owners are also exempt from paying stamp duty (a mandatory tax in Australia when the sale/transfer of land or real estate is involved) up to a purchase price of $500,000 and for those purchasing over $500,000 pay a reduced amount of stamp duty. That’s a huge saving!

Let’s look at an example for a purchase in NSW:

purchase price $300,000
loan amount $270,000 (assuming FHOG & savings will make up the 10% deposit + costs)
usual stamp duty amount on a $300k purchase price = $8990
stamp duty payable as a first home owner = $0!

Unfortunately for those in Victoria the above example isn’t quite as beneficial:

usual stamp duty amount on a $300k purchase price in Vic = $13,660
stamp duty payable as a first home owner = $13,660
the FHOG in Vic is $7,000 but there is a First home Bonus also for $3,000 or $5,000 which can also be obtained but stamp duty is unfortunately not waived

So why does the FHOG amount differ from state to state?

Each state administers the grant, so each state will determine the rules for the grant. The common rule is that you must purchase for an owner occupied purpose, and you must live in the property for six months out of the first twelve months of ownership! In other words, you can purchase and rent it out for six months but then you must move into it for the remainder of the twelve month period! It also must be your first property purchase and this can get a little tricky if you’re in a relationship and one person has owned before and one hasn’t.

The FHOG is essential to enter the Property Market!

I know from personal experience that the FHOG was essential for me in order to purchase my first home, I simply could not have considered entering the property market when I wanted to without it!! I figured while it was available I would utilize it because who knows when the Govt may change the rules!! The application form is submitted to the lending institution during the loan approval process and they will liaise with the appropriate people and get the FHOG approval done. Or, you can actually submit it yourself but is way more hassle this way. It’s best to let the Bank handle it!

Other resources for First Home Buyers

I wrote a previous post for evey first home owner looking to purchase on an Essential Checklist Every First Home Buyer Should Have! Be sure to use the checklist when considering your purchase!!

For further info on FHOGs in NSW go to
go here!
For further info on FHOGs in Vic go to
go here!

If there are any questions regarding the FHOG, please feel free to drop me a line or post a comment so everyone can benfit from the discussion!!