Buying your first property is a momentous occasion that can be very exciting but also challenging at times. The government offers a number of incentives to assist those entering the property market for the first time and accessing these incentives could potentially save you thousands of dollars, so being aware of the options available to you as a first home buyer is important.
We at MJ Legal have listed a few of these below to help guide you with your purchase.
First Home Owner Grant (FHOG)
The First Home Owner Grant (FHOG) is a government initiative that offers a one-off payment of $10,000 to eligible first home buyers who are buying or building a new home in Victoria. If your new property is in regional Victoria, you could receive an increased grant of $20,000.
To be eligible for the grant, you or your spouse/partner must be purchasing a property valued at $750,000 or less, as well as fit the following criteria:
• The property must be a new home, not previously sold or occupied as a place of residence.
• You must be an Australian citizen or permanent resident, or a New Zealander holding a special category visa under s32 of the Migration Act 1958.
• You must be 18 years or older at the time of settlement or completion of construction.
• You or your spouse cannot have already received the FHOG in Australia.
• You or your spouse cannot have previously owned a residential property in Australia, either jointly or separately, before 1 July 2000.
• You or your spouse cannot have occupied a residential property, which either of you have owned or part-owned, for a continuous period of at least 6 months on or after 1 July 2000.
• You must intend to occupy the home as your principle place of residence (PPR) for at least 12 months.
You may also be able to apply for a HomeBuilder Grant, with the program being extended by the Australian Government until March 2021. This time-limited program provides a $15,000 grant for those entering a contract to build or buy a new home between 1 January 2021 and 31 March 2021.
Stamp Duty Waiver
When you purchase a home, you will likely have to pay land transfer duty (stamp duty). However, you may be eligible for a stamp duty waiver of up to 50% for purchases of residential property with a dutiable value of $1 million or less.
You can be eligible for this waiver whether or not you intend to use your new property as your PPR. Additionally, the contract must be signed on or after November 25 2020 and before 1 July 2021, and the arrangement must not be a gift.
First Home Buyer Duty Exemption or Concession
If you’re a first home buyer purchasing an established home you won’t be eligible for the FHOG, but you may be eligible for an exemption or concession from duty. The first home buyer duty exemption/concession is a one-off reduction in the amount of stamp duty you pay, that applies if you enter into a contract on or after 1 July 2017.
This assistance can also be available in addition to the FHOG for those eligible. The first home buyer duty exemption applies if your home has a dutiable value of $600,000 or less, and for a dutiable value from $600,001 to $750,000 the first home buyer duty concession will apply.
The first home buyer duty reduction is a one-off duty reduction of up to 50% for a home with a dutiable value up to $600,000 for those who entered into a contract before 1 July 2017.
There are other concessions from stamp duty that are available, such as off-the-plan concession, pensioner concession and PPR concession, and you may be eligible for more than one.
If you would like further information on your options, you can contact our team at MJ Legal to learn more and allow us to assist you with the purchase of your first home.