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How Does the First Home Owner Grant Work?

Introduced in 2000, the First Home Owner Grant (FHOG) is a national scheme that is funded and administered independently by individual states and territories. It was set up to help defray the cost of the GST that is levied on new homes, in order to encourage home ownership and new builds across Australia. In Western Australia, the FHOG is worth $10,000 to new property buyers. It’s not a huge sum in today’s terms but every little helps and, in conjunction with various other schemes that are currently active in WA, it could help you to save money when buying your first home.

Eligibility Criteria for FHOG in Western Australia

The first thing you will want to know about the FHOG is whether you are eligible. Fortunately, the criteria set out for eligibility are very straightforward:

  • Australian Residency – You must either be an Australian resident or have permanent leave to remain in order to qualify for the grant. If you are buying a first property with your partner, only one of you needs to be an Australian resident or have permanent leave to remain. In such cases, the state is willing to be more flexible with regards to the immigration status of the second party.
  • 18 Years or Older – The rules state that grant applicants should be 18 years of age or older, although it is possible for younger applicants to apply for an exemption to this rule under certain circumstances.
  • First Time Buyer – If you have previously owned a property in Australia, you will not be eligible for the grant.
  • New Builds – You must either buy a newly-built property or build a property of your own in order to qualify.
  • 12-Month Moving in Limit – After receiving the grant, you must move into your new home within 12 months or it will have to be repaid. You must also continue to live in the property for at least 6 months after you move in.
  • Maximum Property Value of $750,000/$1,000,000 – If the house you are buying is located south of the 26th parallel, it must not cost more than $750,000. If it lies north of the 26th parallel, the value cap is set at $1,000,000. If you have no idea where the 26th parallel is, it bisects the coast of Western Australia about 35-40 kilometres south of Wooramel.

If you are not sure about any of the criteria mentioned above, you can contact the WA government for clarification or speak to one of our consultants if you prefer.

How to Apply for a First Home Owner Grant in Western Australia

If you believe that you are eligible for the FHOG in WA and you would like to apply, you can download a PDF file of the application form here. Once you have downloaded the form, you will need to print it out and complete it. You should then send it, along with any supporting evidence that is asked for, to an approved agent or directly to RevenueWA.

If you are a first time buyer building a new home with Next Level Homes, we will be delighted to help you with your application so please don’t hesitate to ask for assistance at any time.

First Home Owner Grant FAQs

If you have any questions about the grant and how it applies to first time buyers with Next Level Homes, you can contact us during normal business hours. In the meantime, you may find the answers you are looking for in the FAQs below.

For How Long Will the FHOG Be Available?

At the time of writing, there is no information about when the FHOG may be withdrawn. Certain states have already started to make changes to the way in which the grant is administered but at the moment it is still available in WA under the terms outlined above. However, grants like this are normally withdrawn or substantially reduced at some point in time so if you would like to take advantage of the FHOG, we recommend applying sooner rather than later.

Will I Still Have to Pay Stamp Duty?

This will depend on the value of the property that you buy or build in Western Australia. If the total cost is $430,000 or less, you will not have to pay any stamp duty. For properties that cost more than $430,000, stamp duty is calculated on a sliding scale. If we are building a home for you that costs more than $430,000, we will be able to help you make the necessary calculations to work out exactly how much stamp duty you will have to pay.

When Will I Receive the Money?

If you are buying a newly-built property, the grant will usually be paid to you once the sale has been successfully completed. When applying through an agent, a sale is considered as completed on the settlement date. When applying directly to RevenueWA, the sale is considered as completed once your name has been registered on the Certificate of Title for the property and you have provided evidence of this.

If you are building your own home, either with Next Level Homes or with another reputable WA home builder, the grant should be paid out once the construction work has started and the first progress payment has been made. As with new builds, if you apply directly to RevenueWA, you will also have to provide evidence that your name is registered on the Certificate of Title before receiving your grant for a contract to build.

Can I Put the FHOG Towards My Deposit?

This will depend on the lender that you apply to for your home loan. In the normal course of events, lenders prefer to see evidence of a cash deposit before they will approve a new home loan but some lenders are happy to consider a pending FHOG payment as part of the deposit if they are shown evidence that approval is imminent. If you would like to put your FHOG towards the deposit on your new home, we recommend talking to your lender about the matter to see if they are willing to accommodate your request.

What if I Can’t Comply with the 6-Month Residence Requirement?

If you move into your new home and subsequently find that you’re not able to remain there for 6 months, in order to meet the FHOG terms, you should contact RevenueWA at the earliest possible opportunity. They may be willing to reduce the residence requirement but if this is not the case, you can volunteer to repay the grant. In either case, it’s important that you take the first step: if you fail to inform RevenueWA of your problem and it is subsequently discovered in an investigation, you may be liable to pay a penalty in addition to repaying the grant. As the maximum penalty is 100% of the grant amount, it’s something you’ll want to avoid if at all possible.
If you have any further questions about the FHOG and how it may apply to your contract to build a double storey home with New Level Homes, please feel free to contact us by phone or email.

27 Aug 2021