The make up of number of first home buyers as proportion of overall property market transaction has been declining since its peak in 2009.
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The run away house prices in Sydney and Melbourne are making it difficult for those that are looking to buy their first home. Perth real estate market is the only major state where there residential housing price is negative year on year.
We are cautious on Australian residential properties as evident by the current low rental yield. However we understand that not everyone can sit out the market or see real estate as investment. People move, or just want a place to settle down and call home irrespective of the market.
First home owner grant or commonly known as the first home buyer grant is a government subsidy aimed to help those that are buying their first home in Australia. It is designed for permanent residents and citizens only. Depending on ones circumstances, the value given might not be large. For most every bit helps and in some instances might cover the mortgage insurance.
For those that qualify, there are forms on the individual state government revenue service website that can be downloaded and lodged after settlement.
Each state has its own variation of the policy but there is no federal government first home owner grant policy.
Key Common features
- The allowance can come in the form of cash, stamp duty concession and depending on the state it can apply to existing houses or new houses only (note this includes apartments).
- It can apply to purchases as well as funding new home construction.
- Typically, the allowances are not means tested. This means that irrespective of the individual’s income or other assets. Note those that already own a home cannot qualify for a second dipping. The requirements are designed so that if you received similar concession in another state.
- While the policy is not means tested. Each state set its own cap in limiting the benefits to those that are on the lower income scale. The total amount is gradually phased out when the value of the dwelling approaches the cap and zero out thereafter.
- It only applies to purchases made by individuals, not company or trusts.
- Some states counts couple as single entity so there will be no double dipping.
- Buyers must live in the dwelling for a set period, usually 12 months.
Australia FHB Summary
The chart below shows a summary of the various plans in place across Australia.
One of the most common question is what is the cap amount? We have gone through each state’s government website to highlight the most interest differences as well as the limit the market value of the house or apartment must be under to qualify the subsidy.
First Home Owners Grant NSW
NSW Office of State Revenue shows that the cap for a house or apartment to qualify the first home owners grant is $835,000.
The owner can either apply for the amount through an agent or directly but must apply within 12 month of settlement.
First Home Buyers Grant QLD
Queensland has a grant as well as stamp duty concession. Total cap for the $15,000 grant is $750,000.
Also FHB stamp duty concession is gradually capped up to $504,999.99
First Home Buyers Grant VIC
VIC State Revenue Office state that first Buyer Grant only applies to purchases under $750,000. A one off stamp duty also applies up to $600,000.
Note the buyer grant only applies to new builds and not established homes. However stamp duty concession still qualifies.
First Home Owners Grant SA
South Australia has separate values for newly built and existing homes. Also additional concession applies to the off the plan concession program but they must meet another set of specific criteria.
The cap of the market value of properties is $575,000.
First Home Buyers Grant WA
The finance depart of WA manages the program. Interestingly, the cap $750,000 south of the 26th parallel and $1,000,000 north of the 26th parallel. All amounts applies to funding new construction or buying new builds.
First Home Owners Grant TAS
New homes only.