GUIDE: First Home Owners Grant Queensland

Buying a home is one of the most significant milestones for many Australians, but with rising property prices, taking that first step can feel daunting. Luckily, Queensland offers the First Home Owners Grant (FHOG) to ease the financial pressure on first-time buyers.

In this guide, we’ll break down everything you need to know about the grant, eligibility requirements, application process, and additional financial incentives that can make buying your first home in Queensland more affordable.

What is the First Home Owners Grant?

The First Home Owners Grant is a state initiative designed to make home ownership more accessible for first-time buyers by providing a financial boost toward the purchase or construction of a new property. The Queensland Government offers up to $15,000 under this scheme, a sum that can be crucial in reducing mortgage burdens or covering essential upfront costs.

Key Details:

• Grant Amount: Up to $15,000 for eligible applicants.
• Property Value Cap: The grant is available for new homes with a total property value not exceeding $750,000.
• Purpose: Applicable for buying or building a new home, including units and townhouses, that have not been previously occupied or sold.

The grant payment is typically made to your lender at settlement, which allows the funds to go directly toward your mortgage, reducing the amount you need to borrow.

How the First Home Owners Grant Works

The grant can be applied during various stages of the purchasing process, allowing flexibility depending on when you plan to buy or build.

1. Application Timing: You can submit your application before, during, or after you have finalised your purchase, but it’s essential to apply within one year from the property’s completion or purchase date.
2. Grant Disbursement: If you’re purchasing a new home, the grant is paid at settlement. If you’re building, it’s generally disbursed after your first progress payment has been made to the builder.

Eligibility Criteria for the First Home Owners Grant

Eligibility for the First Home Owners Grant in Queensland includes several criteria to ensure the grant is supporting those who genuinely need assistance entering the property market. Below are the main requirements:

Applicant Requirements

• Age and Residency: All applicants must be at least 18 years old and either Australian citizens or permanent residents.
• First Home Buyer Status: You and any co-applicants, including your spouse or partner, must not have previously owned property in Australia. This restriction applies whether you’ve owned property individually or jointly.

Residency Requirement

• The FHOG is intended for owner-occupiers rather than investors. Recipients must move into the property within 12 months of its purchase or completion and live there as their primary residence for a continuous period of at least six months. Failing to meet this residency requirement may require you to repay the grant.

Property Requirements

• New Homes Only: The grant applies strictly to new homes, including houses, units, and townhouses that have never been occupied or sold previously.
• Value Cap: The property’s value must be less than $750,000, which includes both the land and dwelling.

Savings Potential with the First Home Owners Grant

The First Home Owners Grant, along with other government concessions, can result in significant savings for first-time buyers. Here’s how much you could save with the grant and other incentives:

Stamp Duty Concessions:

In Queensland, first home buyers may qualify for a full exemption from stamp duty on properties valued under $500,000. For properties above this amount but under $550,000, partial concessions apply. This means that if you purchase a property at the right price point, you can save tens of thousands on stamp duty, making the initial costs of buying a home more manageable.

Combined Savings:

The combined impact of the First Home Owners Grant and stamp duty concessions can save you as much as $20,000 to $30,000, depending on the property’s value. These savings can be pivotal in reducing the size of your loan, lowering monthly repayments, or covering additional fees related to buying a home.

Potential for Extra Savings with Lenders:

Many lenders offer special packages for first-time buyers, which may include waived application fees or reduced deposit requirements. These incentives can further reduce the financial strain of purchasing your first home.

How to Apply for the First Home Owners Grant in Queensland

Applying for the First Home Owners Grant is a straightforward process, but it’s essential to follow the steps closely to avoid delays. Here’s a guide to applying:

Step 1: Collect the Required Documents

You’ll need several documents to complete your application:

• Proof of Identity: Passports, driver’s licences, and birth certificates for all applicants.
• Proof of Citizenship/Residency: One applicant must be an Australian citizen or permanent resident.
• Contract of Sale/Building Contract: Include all agreements signed during the property purchase or building process.

Step 2: Decide How to Apply

• You can apply through your lender if they are an approved agent for the First Home Owners Grant, or you can submit your application directly to the Queensland Office of State Revenue.
• Applying through a lender can streamline the process, as they handle much of the paperwork on your behalf and coordinate grant disbursement with settlement.

Step 3: Submit the Application and Wait for Approval

• The approval process generally takes a few weeks. Submitting your application well in advance can help prevent delays in receiving the funds at settlement.

Additional Grants and Incentives for First-Time Buyers in Queensland

In addition to the First Home Owners Grant, first-time buyers may be eligible for other government schemes that provide additional financial support:

First Home Loan Deposit Scheme (FHLDS):

• This federal scheme allows first-time buyers to secure a home loan with as little as a 5% deposit, with the government acting as a guarantor to avoid Lenders Mortgage Insurance (LMI).
• You may be able to use the FHLDS in conjunction with the First Home Owners Grant, further reducing the amount of upfront cash you need to buy a home.

HomeBuilder Grant (availability may vary):

• Although no longer widely available, the HomeBuilder Grant offered additional financial support to build or significantly renovate a home. First home buyers who applied while the scheme was open may have combined it with the FHOG.

Regional Home Building Boost Grant:

• For those purchasing in regional Queensland, this grant provides additional financial assistance, helping more people buy homes in less densely populated areas.

First Home Buyer Grant Frequently Asked Questions

Can I Use the First Home Owners Grant for an Established Home?

No, the FHOG in Queensland only applies to new homes, including those bought off-the-plan or homes that have been newly constructed and have never been sold or occupied.

Will the Grant Affect My Tax?

No, the First Home Owners Grant is not taxable and does not need to be reported as income.

What Happens if My Living Circumstances Change?

If you are unable to meet the six-month occupancy requirement, you may be required to repay the grant. The Queensland Office of State Revenue reviews these cases individually, so it’s best to contact them if your situation changes.

Can I Reapply if My First Application is Rejected?

Yes, if your application is declined due to missing documentation or other correctable issues, you can reapply. Make sure to provide all necessary details to avoid delays.

Is the First Home Owners Grant Right for You?

The First Home Owners Grant in Queensland is a valuable resource for first-time buyers, potentially saving thousands of dollars in upfront costs and making homeownership more achievable. By combining the FHOG with other schemes like the First Home Loan Deposit Scheme and stamp duty concessions, first-time buyers can minimise their financial outlay and start building equity sooner.

Whether you’re building a new home, buying off the plan, or considering a townhouse or unit, exploring your eligibility for the grant and other incentives is a wise first step. For expert advice, get in touch with Your Advisor Group on the Gold Coast.