Are you eligible for the First Home Owner Grant?

Purchasing your first property is typically no easy feat. You’ve got to save for a deposit, take out a mortgage, pay fees, meet loan repayments, pay taxes and likely more fees. Government assistance schemes and grants are designed to alleviate some of the pressure for first homebuyers.

The First Home Owner Grant (FHOG) is a national scheme, funded by the states and territories, that provides financial assistance to eligible buyers purchasing their first home. The grant amount typically ranges between $10,000 - $25,000, differing depending on the state and territory where the property is being purchased.

The FHOG was introduced on 1 July 2000 to help offset the impact of the GST on homeownership.

The value of funds provided by the FHOG will depend on the state or territory in which the property being purchased is located. To discover more information about the FHOG available to you, you’ll want to visit the Revenue Office website of your state or territory.

The eligibility criteria to qualify for the FHOG differs depending on the state or territory where the property is located. However, to qualify for a FHOG you will typically need to meet the following criteria:

• Be a first home buyer
• Be an Australian citizen or permanent resident
• Be 18-years or over
• Buying and/or building a new home

Each FHOG may also carry its own unique criteria and eligibility requirements based on the following factors:

• Value of the property
• Purpose of the property (exclusions to investors may apply)
• Location of the property within the state or territory
• Whether one or more applicants (and spouses or de facto partners) have previously received the grant or purchased property anywhere in Australia

To obtain detailed information on the eligibility criteria set by your state’s Revenue Office, it may be worth visiting their website/s or speaking to a customer service representative for that Revenue Office.

The FHOG is one option that first time buyers have to help ease the financial burden associated with purchasing property in Australia.

The FHOG can be put towards your property deposit, however it typically will not cover the full amount needed. You may still need to save at least 5-10% of your own deposit to be eligible for a home loan, as well as to showcase that you have ‘genuine savings’.

As property prices rose to record highs in the last few years, it’s fair to say that for some areas, such as Sydney, Melbourne or the ACT, the grant may not go as far as it may have when first introduced in 2000. While the value of these grants has changed over time, it’s worth keeping in mind that you may still need to do the majority of saving for a deposit if you wish to purchase in high market value areas.    

FHOG Advantages:

• Eases the burden of saving for property
• Can be put towards a deposit

FHOG Disadvantages:

• Will typically not cover the entire cost of a deposit
• You may still need to show genuine savings to qualify for a home loan

Australia’s housing market values can be intimidating for many first home buyers across Australia at the best of times. Over the years, the government has made available a range of assistance programs and concession schemes.

These programs and schemes may differ depending on the purpose of the purchase and the financial situation of the home buyer but were all created to make the process more accessible.

Stamp duty concessions and exemptions

One of the biggest upfront costs associated with buying property is stamp duty. First home buyers may be eligible for stamp duty concessions or exemptions, depending on the value of the property they intend to purchase and the state or territory the property resides in. See our state-by-state guide for further information.

If you’re looking to buy in a capital city such as Sydney or Melbourne, stamp duty costs can climb into the tens of thousands of dollars range. However, eligible first home buyers in New South Wales (NSW) now have the option of paying an upfront stamp duty or an annual land tax that’s based on their property’s value.

Eliminating the obligation of stamp duty reduces up-front costs for first home buyers and, depending on your home’s value over time and the implications of future legislative changes, may save you thousands of dollars, particularly if you have intentions of selling your home within a particular time frame. The scheme came into effect 16 January 2023.

First Home Loan Deposit Scheme (FHLDS)

The First Home Loan Deposit Scheme (FHLDS) was created to support borrowers with deposits below the “ideal” 20% mark to purchase property without having to pay costly Lender’s Mortgage Insurance (LMI).

As property prices have climbed significantly in the last decade, saving a 20% deposit can be unrealistic for many first-time buyers. Instead, through this scheme the government acts as a guarantor, supporting a loan application with a deposit as little as 5%.

Family Home Guarantee

Similar to the FHLDS, the Family Home Guarantee supports single parents with deposits as low as 2% to meet eligibility criteria to qualify for a home loan and avoid paying LMI. There is an income cap of $125,000.

First Home Super Saver Scheme (FHSSS)

The First Home Super Saver Scheme (FHSSS) allows eligible home buyers to make additional contributions into their super fund, with the intent that these funds and any returns be put towards a property deposit.

For more information on first home buyer programs and schemes, you can consult our comprehensive guide.