Do you believe it is becoming more difficult to buy a home in Australia, particularly for Gen Y? According to a poll, the average age of first-time homebuyers has increased to 31 years from roughly 25 years in the 1970s.
Remarkably, housing remains out of reach for those just entering the market, even though interest rates are still at an all-time low. The causes are straightforward: rising costs and increased investment loan activity. First-time buyers undoubtedly shudder at the recent discussion on whether to rent or purchase, the rise in banks requiring deposits of over 20%, and the rising prices of real estate in the suburbs.
In 2001, the government introduced the $7,000 First Home Owner Grant (FHOG) to address this issue. In the years 2008 and 2009, the amount was quadrupled to $14,000, and at the moment, many states are granting grants in various amounts.
How does the first home owners grant (FHOG) work?
A first home owner grant could significantly improve your financial situation if you purchase your first property. Most lenders can accept the grant on your behalf and apply it toward the deposit amount.
- Every state oversees the first home owners grant, a federal award.
- Many jurisdictions offer additional benefits and stamp duty reductions in addition to the basic grant amount, particularly for new construction.
- There is a cap on the overall amount of the purchased property, but the grant is not income or means based.
- You can only receive the grant once, and it is tax-free.
Are you eligible for the first home owners grant (FHOG)?
The first-time home owner grant is subject to various requirements because it is intended to purchase a property.
- You must be at least 18 years old, an Australian citizen or permanent resident (not a company or a trust), and a natural person.
- You and your spouse should not currently or ever have owned a single residential property.
- You and your spouse should have used something other than the grant. Furthermore, the reward is only given out once every transaction, regardless of the number of applicants.
- Australia must be the location of the property. It must be an existing home or a brand-new building that can be utilized legally as a habitation.
- You must begin living in the house you are buying or having built for you for a minimum of six months within a year of the purchase’s completion. This indicates that the purchaser must remain for six months, beginning within the first twelve months following the acquisition.
Once your application has been accepted, the grant’s payment schedule will change depending on the kind of residence and the state. Normally, payment would be made upon settlement for a new or existing house.
You may qualify for several state support programs as a first-time home buyer to help you move into your property more quickly. You may be eligible for the First Home Owner Grant, a one-time payment in addition to savings on stamp duty.