First home buyers - entitlements

by Sarah Lindsey

IF YOU are a first home buyer it’s important to keep up with entitlements for which you may be eligible for.

As of 1 July 2013

A purchaser who buys a new or off the plan home or vacant land (upon which a residence is to be constructed) for less than $750,000.00 may be eligible for the First Home Owners Grant (FHOG) in the amount of $10,000.00, subject to satisfying eligibility requirements.

The FHOG is no longer available for the purchase of an existing home.

Eligibility for the FHOG

  • For an overview of the FHOG, eligibility requirements, application form, and application form lodgement guide, please visit the State Revenue Office (SRO) of Victor ia’s website
  • There are supporting evidentiary requirements as to proof of identity;
  • At least one applicant must move into the house within 12 months of settlement and live in the house as their Principal Place of Residence for at least 12 months.


Availability of funds at settlement

If the FHOG is required at settlement the purchasers should make an application through the lender (an approved agent), so that the funds are available at settlement in addition to the Net Loan Proceeds (NLP). The NLP is the amount available for settlement after Duty, Titles Office Registration Fees and other bank charges including application fees and mortgage insurance have been deducted from the loan advance.

Alternatively, an application may be made directly to the SRO for up to 12 months after settlement.

Duty concessions

A first home buyer may be eligible for a Principal Place of Residence (PPR) duty concession in the amount of $3,100.00 for a property purchase from $440,000.00 to $550,000.00. A lesser concession on a sliding scale is available for a property purchase between $130,000.00 and $440,000.00.

A further reduction in duty of 50% (from 1 September 2014) may also apply, provided that the purchase price is less than $600,000.00. This reduction is available if all FHOG eligibility requirements are met, but because the purchase is of an existing rather than new home, the FHOG is not received. In other words, the first home buyer remains eligible
for the duty reduction despite not being fully eligible
for the FHOG.

Some banks will deduct the reduced amount of duty from the loan at settlement based on the relevant statutory declarations being made for submission to the SRO, along with the transfer documentation. However, a small number of lenders insist on deducting the full amount of duty at settlement and refunding concessional reductions after settlement once the documentation has been stamped and registered. Enquiries should be made of the relevant lender at the time the loan application is made to ascertain the lender’s approach.


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