The Complete Guide to First Home Owner Grant (FHOG) VIC

What is the First Home Owner Grant VIC?

The First Home Owner Grant is funded by the state of Victoria for first home buyers that need a boost to get into their own property.

It is a lump sum payment of either $10,000 or $20,000 to help alleviate the financial pressure of those wanting to get into new home ownership.

The First Home Owner Grant VIC also delivers some considerable discounts and works hand in hand with other available government subsidies, depending on your circumstances.

The grant is part of the Homes for Victorians initiative, designed to stimulate the housing market and provide greater access to the property market for regional and metropolitan Victorians. Alongside the exemptions and discounts designed to supplement the FHOG package, potential first home buyers have more buying power to support their effort to get on the property ladder.

In April 2020, in the face of the global pandemic, the state government announced that it would be extending the FHOG for a further 12 months for regional home owners—taking the grant out to June 2021. Victorian Treasurer Tim Pallas stated that: “The coronavirus pandemic is making it even tougher for young people to achieve their dreams (of home ownership), that’s why we’re extending the grant which helps so many regional Victorians.”

How Much Can I Expect From The First Home Owner Grant VIC?

$10,000 For The Metropolitan Melbourne First Home Owner Grant

For first home buyers, the FHOG VIC entitles you to a $10,000 grant on your first residential home up to the value of $750,000. If this home is:

• Valued at less than $750,000, and
• In metropolitan Melbourne, and
• Has newly been built, or
• Is an existing property being sold as a residence for the first time, or
• Is based around a land and building package, and
• Is less than five years old

…then it could qualify for the Metropolitan Melbourne FHOG VIC. We’ll outline all the eligibility criteria in a later section of this guide, to help you establish if you and your family qualify for funding.

$20,000 For The Regional First Home Owner Grant

The regional First Home Owner Grant entitles eligible new home buyers to a $20,000 one-off payment where you’ve signed a contract to buy or build a new home in regional Victoria. If this home is:

• Valued at less than $750,000, and
• In regional Victoria, and
• Has newly been built, or
• Is an existing property being sold as a residence for the first time, or
• Is based around a land and building package, and
• Is less than five years old

…then it could qualify for the regional Victoria First Home Owner Grant.

You may want to speak with us at Blutin Finance, a Finance Broker in Melbourne to find out more about your options.

What Is Regional Victoria?

For reference, regional Victoria is classified by the Victorian government as any property under the governance of a regional council on this list, as well as the alpine resorts of Lake Mountain, Falls Creek, Mt Hotham, Mt Stirling, Mt Buller, and Mt Baw Baw.

What Supplementary Grants Are Available?

Stamp Duty Exemption or Concession

Where your property (or potential property) is valued under $600,000, first home owners don’t pay stamp duty—which essentially saves you tens of thousands of dollars. If your new home is valued at between $600,001 and $750,000—the upper limit of the First Home Owners Grant—you may still qualify for considerable stamp duty concession. To calculate how much stamp duty you may be liable with your property purchase, use this Stamp Duty Calculator.

The concession system is based around your settlement date, with the greatest rate of discount—50%—available to those who settled on or after 1^st September, 2014.

Stamp duty exemption and concession are available to all first home owners, regardless of the age or establishment date of the property.

Stamp Duty Exemption or Concession for Families

If you have a dependent child in your care at the time of settlement, and your first home is valued at less than $200,000, you may also be entitled to a duty concession.

Off-The-Plan Concession

You might qualify for first home owner duty concession when buying a land and building package off-the-plan after 1 July, 2017. Off-the-plan concession deducts the cost of post-contract-date construction from the contract price of the residential property. Effectively, you will only be required to pay stamp duty on the improved value of the land plus gross non-deductible costs and completed construction.

Types of Off-The-Plan Concession

Eligibility for the off-the-plan concession falls under two categories:

1. Off-the-plan land and building. The term off-the-plan land and building refers to a new home owner’s contract to buy land and build a new house, unit, or apartment on that section.
2. Off-the-plan refurbished lot. The term off-the-plan refurbished lot refers to a first home owner’s contract to buy an existing building and refurbish it for the purpose of living in it. Converting a warehouse into a residential apartment—like the New York loft-style apartment—would fall under this category. Only the initial property owner who registers the refurbishment is eligible for this type of concession, which means it doesn’t apply to future home buyers or under the terms of a sub-sale.

Pensioner Exemption or Concession

If you are over the age of 66—between 1 July, 2019, and 30th June, 2021—and buying your first home, you may qualify for a pensioner concession. The pensioner concession is not available in conjunction with a first home buyer’s duty exemption or concession, so we recommend doing your due diligence to establish which is more beneficial in your circumstances.

The 50% pensioner concession applies where your first home is valued at between $330,001 and $750,000—the maximum property value under the First Home Owner Grant initiative. If your first home is valued at up to $330,000, qualifying home buyers will receive a full exemption from duty.

Eligibility for Pensioner Exemption or Concession

In addition to the eligibility criteria we outline later in this guide, those wishing to apply for pensioner concession will need to:

• Buy their first home at market value
• Reside in the home
• Hold a state-recognized concession card at date of settlement

Property Eligibility for Pensioner Exemption or Concession

The property you intend to buy must also be:

• Valued at less than $750,000, and
• Be newly built, or
• Be an established property, or
• Be built under a house and land package, and
• Be completed within three years of your settlement date

Combined Eligibility for Pensioner Exemption or Concession

Where you are buying your first home with someone else, and at least one of you is a pensioner, that person will be able to apply for the pensioner exemption or concession. If you are buying your first home and you are both pensioners, each party is buying a part interest in the home. Your eligibility and entitlement under the pensioner exemption or concession subsidy will be based around the interest you hold in the property.

For example, if you are buying a 50% interest in a first home valued at $650,000, the value of your interest is $325,000—under the full exemption threshold. This means that you will be exempt from paying duty on your interest in the property, and save yourself a 50% share of $34,070 (at date of writing). If you are buying your first home with someone who does not qualify for pensioner concession or exemption, they will still be liable for 50% of the Victoria stamp duty. It’s important to note that you can only qualify for the pensioner exemption or concession one time.

The Young Farmer Concession

The Young Farmer concession is available to you if you are under the age of 35 and purchasing your first farm. It is not available in conjunction with the PPR concession—Primary Place of Residence concession—so we recommend doing your due diligence to establish which is more beneficial in your circumstances. If you require assistance, we can support you in getting the answers you need and keeping more of your hard-earned savings.

Eligible first home buyers aged below 35 who qualify for the Young Farmer concession may be entitled to:

• Exemption from duty on the first $300,000 of farm value, when the farm is valued at under $600,000, or
• Concession where the value of the farm is between $600,000 and $750,000.

Can you also get the First Home Bonus?

The First Home Bonus is available in conjunction with the First Home Owner Grant where you entered into your contract prior to 1 July, 2012, and it was your first home purchase, and it meets the criteria required for the FHOG VIC.

To qualify for the First Home Bonus, you must have:

• Entered into your first home contract prior to 1 July, 2012, and
• Not received the duty exemption or concession for families, and
• Have purchased either an established residential property, or
• A new construction in metropolitan Victoria, or
• A new construction in regional Victoria.

The First Home Bonus ranges from $2,000 to $13,000.

What Are The Eligibility Requirements of The First Home Owner Grant VIC?

The eligibility requirements of the FHOG VIC can seem daunting for first home buyers, but they can deliver a considerable financial boost onto the property ladder. As such, it’s worth taking the time to understand what you could be entitled to, and how the properties you consider impact your entitlements under the FHOG initiative.

First, a refresher on the criteria your new home must meet in order to be eligible for the First Home Owner Grant:

Property Requirements

• Valued at less than $750,000, and
• In metropolitan Melbourne (to qualify for the $10,000 metropolitan FHOG VIC), or
• In regional Victoria(to qualify for the $20,000 regional FHOG VIC), and Be newly built, or
• An existing property being sold for the purpose of living in, or
• Be a land and building package, and
• Be less than five years old

Historic Requirements

In order to be eligible for the FHOG VIC you must meet the criteria laid out by the Victorian government. You and your spouse/partner must:

• Not have received the FHOG in Australia
• Not have owned a residential property—either individually or together—prior to 1 July, 2000
• Not have lived in a home owned (or part-owned) by either you or your spouse / partner for more than 6 months, on or after 1 July, 2000

Under these initial criteria, if you owned a residential property after 1 July, 2000, but can demonstrate that you did not live there—for example, if it was a rental property—you may still be eligible for the FHOG VIC. The crucial part of the equation is your real estate ownership status prior to 1 July, 2000—regardless of your relationship at that time—and your living situation after 1 July, 2000.

If your spouse or partner does not intend to apply with you for the FHOG VIC, they will still be tested against the above criteria.

Individual Requirements

In addition to the above criteria, to be eligible for the FHOG VIC applicants must be:

• Over the age of 18 at date your contract is signed (some flexibility is afforded), and
• Australian citizens or permanent residents (see below), and
• Intending to occupy the home as your primary place of residence (PPR) for a minimum period of 12 months, with this period commencing within 12 months of signing a contract for the property or completion of construction, and

Citizenship and Residency

To qualify as a citizen or permanent resident of Australia, you will need at least one of the following:

• A permanent visa under s30(1) of the Migration Act 1958, or
• To be a New Zealand citizen holding a special category visa under s32 of the Migration Act 1958, and be in Australia at the settlement date, or
• A passport issued by the Australian government in your name, if you were born on or after 20^thAugust 1986, or
• A full birth certificate issued by an Australian Registry of Births, Deaths, and Marriages office, if you were born in Australia prior to 20^thAugust, 1986, or
• An Australian citizenship certificate in your name if you were born outside Australia.

Exemption For Defence Force Members

Members of Australian Defence Forces may fail to meet the residency requirements of the First Home Owner Grant where they have been deployed to other states or overseas during the qualification period.

In this instance, the Australian government have created a residency exemption for those currently serving in the Australian Army, Navy, or Air Force. If you are an active member of the Defence Forces and are enrolled to vote in the state of Victoria, you can apply to the State Revenue Office for exemption from the residency prerequisite of the First Home Owner Grant application.

How Do I Complete The First Home Owner Grant Application Form?

The process of applying for the First Home Owner Grant isn’t as overwhelming as you might think. In fact, you may not have to lift a finger.

In many cases, your mortgage broker can lodge your First Home Owner Grant application for you. If you rely on the FHOG VIC for settlement or first draw down payment, check with your mortgage broker or lender early to confirm if they are handling the application process on your behalf.

Submitting Your First Home Owner Grant Application

If you are sure your lender or mortgage broker is not submitting an application as your representative, you’ll need to lodge your application for yourself:

1. Determine your eligibility
2. Compile your supporting documentation. You (and each applicant) must provide four documents—at least one each from the following categories:
   
   • a. Primary ID: A birth certificate issued by the Australian Registry of Births, Deaths and Marriages, an Australian passport, an Australian citizenship certificate, a New Zealand passport, or another country’s passport plus a permanent residence visa (or evidence of permanent residency)
   • b. Australia-issued Photo ID: Driver licence, passport, firearm licence, or 18+ ID.
   • c. Proof of Australian residence: Medicare card, motor vehicle registration, Centrelink card, or Department of Veterans’ Affairs card.
   • d. Proof of current address: A utility bill (water, gas, power, etc.), insurance policy, tenancy agreement, payslip, tax assessment, or mortgage papers.
   • e. Situational evidence: Depending on your relationship or personal status, you should include a copy of your marriage certificate, divorce certificate, a death certificate for your spouse if you are widowed, or a change of name certificate.
3. Complete the application. Several supporting documents are available on the State Revenue Office Victoria website, including a comprehensive lodgement guide. Print your application and complete all relevant parts in either blue or black pen—no other colours can be used. Remember to sign your application.
4. Submit your application. An approved agent can do this on your behalf, or you can package it with all supporting documentation and post it to:

State Revenue Office Victoria

GPO Box 1641
Melbourne VIC 3001

Your application needs to be submitted within 12 months of signing a contract or completion of construction.

What Happens Next?

If you are approved for the First Home Owner Grant, the date on which the grant is paid will depend on several key factors:

• Whether you are building or buying a newly built house
• Whether you applied directly to the State Revenue Office (SRO) of Victoria or through your agent

If you are not approved for the grant, you can seek a review of your application and lodge a written objection to the SRO.

The First Home Owner Grant VIC: Frequently Asked Questions

I have bought an established home. What first home ownership grant am I eligible for?

The established home buyer is not eligible for the FHOG. But if you meet the other criteria we’ve listed above, you may be entitled to some assistance or concessions. The First home buyer duty exemption or concession might be available to you for your established property. Read more about first home buyer duty exemption here. You may also qualify for PPR concession.

If you signed a contract for your established home before 1 July 2013, you could also be eligible for up to $7,000 through the earlier version of the First Home Owner Grants program.

How long do I have to apply for the First Home Owners Grant?

You must submit an application within 12 months of signing your contract or completing construction on your new home. To be eligible for the regional Victoria First Home Owners Grant, contracts must be signed and building must have started prior to 30^th June, 2021.

I was only granted $10,000 under the regional Victoria First Home Owners Grant. Why didn’t I get the full $20,000?

If you signed a contract for your first home in regional Victoria prior to 1 July, 2017, you are only eligible for $10,000 through the First Home Owners Grant VIC. The settlement date is irrelevant in this instance.

How do I know if my mortgage broker or lender is handling my FHOG VIC application?

If Blutin Finance are your mortgage brokers, we will handle the application process on your behalf. If you aren’t partnered with us to buy your first home, you’ll need to ask your broker or lender to be sure. Always make sure your application hasn’t been submitted on your behalf, prior to submitting it yourself.

What is PPR concession, and do I qualify?

Principal Place of Residence concession is available to eligible property owners who intend to live at the property for more than 12 consecutive months, within 12 months of the property settlement date.

To qualify, you need:

• To own a property valued at $550,000 or less, and
• Intend to use the property as your principal place of residence for more than 12 continuous months, and
• Intend to move into the property within 12 months of settlement, or
• Where you hold a part-interest in the property, another part-owner meets these criteria, and
• The property houses a building designed or constructed for residential purposes and is legally able to be used as a principal place of residence.

There are several discretionary clauses within the PPR concession which influences how property owners can meet the criteria. For example, if you hold a part-interest in a property, and meet the above criteria, but only use the property as your PPR for a continuous 6 month period, and another part-owner of the property (who also meets the criteria) uses it as their PPR for a continuous 6 month period, the SRO deems you to have met the qualifying criteria.

Conclusion

If part of your true blue Australian dream is to own your own home, we hope this comprehensive guide has made it that little bit easier.

With assistance from the First Home Owner Grant (FHOG) VIC, you can leverage your entitlements to get your foot on the property ladder.

When you’re in the market for the purchase of your first home in Victoria, an experienced mortgage broker can streamline the process. With access to premium mortgage products and financial solutions, Blutin Finance is here to assist you.