Owning your first home is a fulfilling yet daunting process. From the selection of a proper property and a builder to the accumulation of the necessary finance, it can be exhausting. Thankfully, the NSW government has taken substantial steps to ease the first-home-buying process. Federal policies include grants and concessions that ease first-time buyers’ financial burden, helping them enter the property market confidentially. This blog brings you details of first-home buyer grants in NSW, so you have a little less financial burden on your shoulders.
Understanding the First Home Buyer Grant
Governments offer numerous schemes to assist first-time home buyers in acquiring their desired property. These can be by lending financial assistance, lowering interest rates or introducing subsidies. In NSW, the first-time home buyer grant or First Home Owner Grant (FHOG) is one such federal aid. Under this scheme, eligible individuals receive a grant of $ 10,000 to realise the dream of their first home.
One can use this price to:
- Reduce the financial burden of the purchase
- Cover expenses
- Pay for legal fees or stamp duty
- Manage other related costs
The FHOG, which commenced on July 1 2000, is a first home buyer grant and is a scheme of the Australian states and territories that is funded. It plans to neutralise the impact of GST on home ownership. When the administration identifies that you qualify for the grant according to their specifications, then you receive a lump sum.
Eligibility for NSW First Home Owner Grant
The NSW government authorities determine the eligibility for FHOG based on various parameters. Below is a breakdown of all the criteria:
First Home Owner
To qualify for the grant, this has to be your very first home. It means neither you nor your partner must have owned a residential place in Australia before. Whether you’re seeking a new home or a renovated one, it must be your first home.
Age
Applicants, whether individuals or couples who plan a co-ownership, must be over 18 years old when applying for the grant.
Must Be a New Home
Individuals aspiring for the grant must purchase a new home. It can be a newly built house, townhouse, apartment, home unit, off-the-plan or self-contained fixed dwelling built according to local building codes. Buyers can also be eligible if they purchase a house and land package.
Renovated Home
If you are considering purchasing a renovated home, you are still eligible for the grant. For that, the house must be:
- Substantially renovated with most parts removed or replaced
- Without residents before, during or after the renovations
- Sold for the first time after renovations or completion
Citizenship
You must be an Australian citizen to be eligible for the grant. If not, you must have acquired the permanent residency, which means students or those who will get the residency in future cannot apply for the grant. However, if you apply as a couple, its permissable if atleast one of you has the citizenship.
Price Cap on Property Value
The NSW government aims to offer the grant to deserving citizens who will benefit financially from the assistance. Therefore, there is a price cap on the home-acquiring costs. This also ensures that the grant targets affordable housing options and those who genuinely need financial support to enter the property market.
Here’s a breakdown of the price caps:
- If you acquire a new home, the cost must be less than $600,000
- House and land package can be upto $750,000
- Renovated homes must not cost more than $600,000
Purpose of the Purchase
The government wants to ensure you plan to live in your new home rather than using it as an investment. It’s all about supporting first-time homebuyers, not property investors. So, if you’re dreaming of a cosy place to call your own, the NSW First Home Buyers Grant will offer the needed assistance. However, you’ll not be deemed eligible if you’re eyeing property as a money-making venture.
Tenure
As mentioned in the earlier passage, the grant is not applicable if a home purchase is for investment. Here, the question arises of how the authorities analyse whether the buyer buys for residential or investment purposes. To ease the verification procedures, owners need to spend a pre-determined tenure in their new home. Here is how it works:
The owners have to live in the house for a continuous period of 6 months if the contract for sale was signed before July 1, 2023. However, if the date of signature is on or after July 1, 2023, a stay must be for 12 months.
How can One Apply for the NSW First Home Owner Grant?
After ascertaining your eligibility, you can proceed to apply for it. Below are the steps that may be followed to make such a payment.
Gather Documents
Depending on your dwelling type, you will need a few, all or more of the following documents to place your claim.
- Primary identification documents
- Current residential address proofs
- Copy of contract of sale
- Title Search
- Evidence of the total value of the property
- Final occupation support
- List of renovations (if applicable)
Find an Approved Finance Agent
If you plan to own the house with a loan, your agent can assist you in filing the application for the grant. You’ll need to complete the First Home Owner Grant (New Homes) Application form below:
For contracts exchanged before July 1 2023:
First Home Owner Grant (New Homes) Application form OFH 001 (PDF, 1131.29 KB)
For contracts exchanged on or after July 1 2023:
First Home Owner Grant (New Homes) Application form OFH 002 (PDF, 1056.52 KB),
Also, if you decide to finance your home, there is another assistance scheme that you must know about. It’s the First Home Guarantee (FHBG) that allows eligible home buyers with deposits as low as 5% to get a home loan without paying Lender’s Mortgage Insurance (LMI) fees.
Apply at the Government Portal
You can lodge your application via the FHOG customer portal if you’ve completed the purchase or construction process. Remember to gather all the documents so you can easily upload them and ensure a seamless application process. Moreover, you must lodge within 12 months of settlement or the completion of the construction date of your new home. In case of a delay, you will need to provide additional documents.
Concluding Words
With the NSW First Home Owner Grant (FHOG), you can confidently step into homeownership. It provides a valuable opportunity to own a residence with less financial strain.
The legalities involved in real estate transactions can be quite confusing sometimes but it does not have to be. Let us at Easy Link Conveyancing in Melbourne take the stress out of it for you. Having worked with many new property owners and in light of that, our team can bring your legal issues to bare whilst you concentrate on the joy of owning your new property. We being your partner can assist you in this process.