What is the FHOG and how much is it?
In order to partly offset the burden of the GST on first time home buyers, the Federal Government introduced a First Home Owner Scheme from 1 July 2000 which involves a non-means tested grant to eligible applicants.
The grant is $7,000 and is available to first home buyers who buy an established property or who buy or build a new home.
Between 9 March 2001 and 30 June 2002 the grant was higher for home buyers who purchased or built a brand new home – it was $14,000 between 9 March and 31 December 2001, and then $10,000 between 1 January and 30 June 2002. However, since 1 July 2002, the grant has been $7,000 for both new and established homes.
Am I eligible for the grant?
You will only be eligible for the First Home Owner Grant if you meet all of the following criteria:
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· you are a natural person (ie. not a company or trust) and you were at least 18 years old on the date that you entered into an eligible transaction; · on or after 1 July 2000 you entered into an eligible transaction. That is, you: o signed a contract to an buy a new or established home in Queensland; or o signed a contract to have a new home built on land that you own in Queensland; or o are an owner builder who started building a new home in Queensland. A ‘home’ would include a house, townhouse, unit, flat or other type of fixed self-contained dwelling. A ‘home’ does not include a houseboat or caravan, renovations to a home that you already own, or vacant land; · you apply for the grant within 12 months of settlement or completion of construction of the home; · neither you, your spouse (if you have one) nor any other person who will own the home with you jointly have: o received an earlier grant under the First Home Owner Scheme; or o at any time prior to 1 July 2000 owned an interest in any property in Australia (whether as a home or as an investment property); or o at any time after 1 July 2000 owned an interest in any property in Australia that they lived in as their home. The term ‘spouse’ includes a person to whom you are married, as well as a partner with whom you have lived in a de facto relationship for more than 2 years; · you, or someone else who will own the home with you jointly (whether or not your spouse), are an Australian citizen or permanent resident of Australia; and · you and any other joint owners will live in the home as your principal place of residence within 12 months after settlement of the purchase of the home (in the case of an established home) or after completion of the home (in the case of a home which is being newly constructed). You could rent the property out in the meantime, so long as you commence occupation of the home as your principal place of residence within the required 12 month period. You must continue to live in the home as your principal place of residence for a continuous period of at least 6 months. |
The Government may refuse to pay the grant to you, or may recover the grant from you (plus penalties) if you have already received the grant, in circumstances where they are satisfied that there is an intentional arrangement that has been put in place the sole or main purpose of which is to obtain the grant rather than to acquire a home.
The First Home Owner Grant is not means tested, which means that so long as you meet the criteria outlined above, you will be entitled to the $7,000 grant irrespective of your income or assets.
The price of the home that you buy generally does not affect the amount of the grant. However, in the very unlikely event that you pay less than $7,000 to buy or build your home, then the amount of the grant will be limited to the amount that you have paid for the home.
How do I apply for the grant?
To apply for the grant you must complete a First Home Owner Grant Application Form and provide certain supporting documentation that is requested in the application form. You, your spouse and any other person who will own the home with you jointly must be included in the application form as one of the applicants.
You can obtain a
copy of the application form from the Queensland Office of State Revenue (ph:
1300 300 118) or from participating lenders. Download
Queensland's First Home Owner Grant
application kit
(424K)
here.
There are more than 120 lenders who are approved agents for the purpose of the First Home Owner Scheme, including all of the major lenders. A complete alphabetical listing of participating lenders can be found on the Office of State Revenue website at approved agents.
It is generally easier to lodge the application form with your lender, assuming of course that your lender is an approved agent for the purpose of the First Home Owner Scheme.
When will I receive the $7,000?
Where you lodge the application form through your lender, you will receive payment of the grant at settlement of the purchase of your home (in the case of an existing home) or when the first progress payment is made (where you are having a home built). For an owner builder, the grant will be paid upon completion of the home. If you lodge the application form yourself through the Office of State Revenue, you will have to wait longer to receive the payment.
The grant is paid by an electronic funds transfer of the $7,000 directly into the bank account which you nominate in your application form.
What else do I need to know?
Where 2 or more people are buying a home jointly, they only receive a single grant of $7,000. They do not each receive a grant.
The First Home Owner Grant is not available to a buyer of an investment property (even if it is your first ever property).
If you owned an investment property before 1 July 2000, then even if you have not previously owned a property that you lived in as your home, you will not be entitled to claim the grant when you do eventually buy a home to live in.
However, if you have not previously owned either a home or investment property, and after 1 July 2000 you purchase an investment property, then so long as you never live in the investment property as your home, then you may still be entitled to claim the grant when you later buy your first home.
In February 2006 there were calls from Gold Coast Liberal MP Steven Ciobo to increase the First Home Owner Grant to $15,000, but coupled with tougher eligibility criteria (including an income test and a cap on the purchase price of eligible properties). Federal Treasurer Peter Costello was non-committal on any changes, but a spokesman for the Treasurer did confirm that the Government will be continuing the First Home Owner Scheme.