First Home Buyers Grant
The First Home Buyers Grant was introduced in 2000 to provide financial support for prospective homeowners that might not otherwise be in a position to purchase a new dwelling.
This credit now stands at $7,000 but was actually expanded to $14,000 during the global financial crisis of 2008, which shows potential flexibility in its funding limits as dependent on the wider economic environment for Australians looking to purchase new homes. But while these grant funding limits did revert back to their original amounts ($7,000) after the financial crisis stabilized, there is still a wide range of added incentives that make the process of first-time homeownership much easier.
Capitalising on a Unique Opportunity
Given the drop in housing prices that has been seen in recent years, it can be argued that this $7,000 grant is actually more valuable now than it was in 2000 (when looking at things on an inflation-adjusted basis). This creates a special opportunity for those looking to enter into the world of residential property, and can provide more favourable terms when looking at home loan comparisons. With housing prices approaching their lowest levels in recent memory, first-time home buyers can take advantage of these dual benefits: buying a new home at a historically low price and gaining the extra help offered by the First Time Home Buyers Grant.
Understanding the Application Process
The First Home Buyers Grant is a national program, given funding in Australia at the state level, and governed by the legislation enacted by local municipalities. The $7,000 limit applies to all locations but some states will offer additional grants and subsidies for stamp duties which can be used to cover some of the costs for new construction. The First Home Buyers Grant is not taxable, is not means-tested, and funds will be disbursed through state-approved banks and lenders. So, while funds disbursement is not dependent on income, there will be some restrictions based on property prices for some state locations.
The following is a list of eligibility requirements which must be followed when applying for the grant:
● You must be a first-time home buyer in Australia (with no record of previous homeownership)
● You must be above the age of 18
● You must buy property as an individual (not as a corporate entity)
● Eligible homes will be located in Australia meeting the legal definition of a place of residence
● You must live in the dwelling for more than six months, beginning in the first year after purchase
● The First Home Buyers Grant can only be received once
● The Grant is available only to Australian Citizens or Permanent Residents that have lived in Australia for more than 6 months
In most cases, grant payouts are carried out at the time of settlement. Home loan comparisons for those taking advantage of First Home Buyers Grant will also show that lenders are more willing to approve mortgages for those participating in this program. The grants are paid directly to the mortgage lender, as most reputable lenders are authorized to receive these funds on your behalf. For those building a new home, grants are approved after your mortgage lender issues your initial loan payment. So, as you can see, the process is relatively straightforward and the program is one that many Australians are likely to benefit from when looking to buy residential properties for the first time.