First Home Owner Grants in ACT: How can this help you secure your own home?

By the resi financial blog team, 15 July 2014

First home buyer grants ACT

Taking the initial step towards purchasing your first property in the Australian Capital Territory means looking into the financing options available to you. While there are a number of home loan options for first home buyers, the ACT also offers a First Home Owners Grant (FHOG) to buyers looking to get their foot in the real estate door. 

What is a FHOG?

Introduced in July 2000, the FHOG was a $7,000 fund offered to first home buyers to help them purchase their first home. This was used in part to aid their property goals and partly as an incentive to consider moving from renting through to property ownership. The program is fully funded by the ACT government and ACT Revenue Office and could be a great opportunity for buyers struggling to get into the market.

There is a property value cap on the grant to help avoid abuse of the system, with properties considered for eligibility of the grant needing to be valued under $750,000.

What are the changed details of ACT's FHOG?

From September 1 last year, the value of the grant increased from $7,000 up to $12,500 for new or substantially renovated properties. Since this date, the FHOG is also no longer available for established properties, meaning the property cannot have been lived in or occupied prior to the purchase of the home.

Another change introduced to the FHOG in ACT is the residency requirement, increasing the amount of time buyers need to stay in the property from six months up to a full year.

Who is eligible for the FHOG?

First of all, applicants for the FHOG need to be Australian citizens over the age of 18 and be looking into purchasing a new or substantially renovated property for the first time in the country, having signed the contract for purchase or construction after 1 September 2013.

Furthermore, at least one applicant needs to be a resident in the property for a continuous period of 12 months. This period begins within one year of sorting out the eligibility of the application and purchase of property, which could be something to think about before moving into the region.

Finally, the aforementioned value cap of the property means the fund will not be supplied for any purchases in excess of $750,000.

What constitutes new or substantially renovated property?

Outlined in the rules of the FHOG, a new or substantially renovated property must be:

  • a home that has not been sold previously or occupied as a residence; or
  • a substantially renovated home that, as renovated, has not been previously occupied or sold as a place of residence; or
  • a property which is subject to an off the plan purchase agreement.

Substantial renovation is defined as makeovers that affect the entire property, resulting in removal and replacement of most - if not all - of the previous house and must affect most rooms. So a kitchen renovation or only redoing one room of the property will not constitute a substantial renovation with regards to securing the FHOG in ACT.

If you're thinking about buying your first home in the Australian Capital Territory, call us today on 136 126 and speak to our team of specialists at resi and find out how we can help you with getting your first mortgage.

Categories: Home Loans, Personal Finance