Ep16: Part 2 - Your Complete Guide to First Home owner grants – How much free money can you get! Part 2 of 2

Hey guys, this is Part 2 of your complete guide with the first homeowners grants.

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How much free money can you get?

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If you haven't listened to part one yet, I'd recommend going back to that.

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That's episode 15.

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It was launched last week.

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For the rest of you, let's begin.

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Welcome to the Home Loan Insider.

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I'm Max Lending, your industry insider, and we're lifting the lid on the finance market, guiding you on how to cut through the jargon, manage your finances and get investing into the property market.

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And those with the keen ear, they would have noticed that last week's episode's music was from the Flying Lizards, which was actually a cover of this week's music, which was from Barrett Strong in the 1960s.

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See, we're not only just about money on this podcast.

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OK, with your musical history lesson over, let's get stuck into it.

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So last week was all about the different federal grants.

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This week will be all about the different state grants.

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I'll go through each state one at a time, and I'll bang out the different grants that are available to you before I unleash a massive dump of information on you.

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These grants, they come and go.

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So if you want to keep up to date with the current grants in your state, I'll teach you a secret.

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You listening?

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Come closer.

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Closer.

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OK, you go to Google and you type in SRO and then you type the state AKA Vic, NSW, Queensland.

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That's it.

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The top search result will be the State Revenue Office website for that state, and that's where all the information's updated.

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It's not rocket science.

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First off, the blocks is Victoria.

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They have what's called FOG.

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No, FOG is not cataracts in your eyes.

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It stands for First Homeowners Grant, and this is a $10,000 payment.

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But there are a few catches.

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Let's go through them.

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Your new home must be valued no more than $750,000.

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It has to be a new home, so it can't be existing.

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Unfortunately, this property must not have been previously sold, lived in, et cetera.

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You must be over 18.

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OK?

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You must occupy this property as your principal place of residence for at least 12 months, unfortunately, like I said before.

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Established homes are no longer eligible for the first homeowners grant, and you're not eligible for the grant if you're buying with a spouse that already has interest in a residential property in Australia somewhere.

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So a few key caveats.

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Basically, just to sum it up, you get the $10,000 payment if you're buying a new property and the person you're buying with doesn't already own a property or even yourself.

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Fun fact here, a lot of people don't know this, and this is where the insider comes into the Home Loan Insider.

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You may actually still be eligible for the First Home Owners Grant if you or your partner purchased a property on or after July 2000 and you've not lived in this property as your home.

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So for example, if you bought your first property in July 2004.

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And it was a house that you've always rented out and never lived in that property and it's only been a rental.

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This house is not considered as your residential home and you may still be eligible for First Home Owners Grant.

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So let that sink in.

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Not a lot of people know that.

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The second grant that Victoria offers is a concession or discount on stamp duty.

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There's two of these.

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The first one's called the First Home Buyers Duty Exemption.

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Or concession.

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Geez, these names are so boring they really need a marketing team to make these a little bit more jazzy anyway, which basically is an exemption on stamp duty when the value of the house is no more than 600 K But if you're buying a house between 600,000, no more than 750,000, then you'll get a concession on the stamp duty.

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So the ones under 600K, you don't pay stamp duty at all, and the ones between 600 and 750, you'll get a discount on the duty that's payable.

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The second one of these is called the principal place of residence duty.

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This one I find pretty useless, but basically your house needs to be between 130,000.

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And 550 K It's pretty useless, like I said, unless you're purchasing further out.

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But look, these are available and both of these are available for established homes as well, which is great.

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The last thing that Victoria offers is the Victorian Homebuyers Fund.

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This is an interesting one.

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The Victorian Homebuyers Fund is a shared equity scheme.

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Let me break it down.

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If you have a 5% deposit, the Victorian Government could contribute up to 25% of the purchase price.

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In exchange for the equivalent share in your property.

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This will save you money by reducing the mortgage and removing the need for lenders mortgage insurance.

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Participants are required though to buy back the government's share over time, so this would trigger when you try and refinance the property.

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You can do that by using your own savings to pay them back or upon sale of the property.

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The Victorian Government though does not charge any interest on their ownership portion.

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But they do share in any capital gains or losses.

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So I'll quickly go through the criteria of this.

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The purchase price needs to be less than 950,000 in areas of Melbourne and Geelong.

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For any regional areas it's less than 700,000.

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You need to be Australian citizen, New Zealand citizen, PR, over 18 years old, have saved the required minimum deposit which is 5%.

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If you're an individual, you need to earn less than 100 and thirty-five $1000 and if you're in a joint application.

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Jointly, you need to earn less than 216,000.

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It needs to be your own occupied property and again need to own no other property.

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How this works in real life though, you're going to commit a 5% deposit and the government's going to commit 25% deposit.

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You're then going to go get a 70% loan from a participating bank.

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The government is going to own 25% of your house.

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It's an interest free loan, but when you sell refinance this property, you need to pay them back to twenty-five percent at the current dates value.

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This is genius from the government if you think of it in terms of them getting their hands on your future capital growth as you have to buy back to twenty-five percent at the future dates value of your property.

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I personally do not like this scheme.

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But I can see it helping you get into the property quicker if you're desperate.

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I wouldn't like to have to pay back this future debt because it's increasing as fast as the value of my property increases.

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But hey, what do I know?

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Let's move on to the big old NSW.

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Uh, they've got 3 grants or schemes available.

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Their first one is the first home buyers assistance scheme.

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It's essentially a full exemption on stamp duty, which that can be a huge saving.

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If you're buying a new or existing home valued up to $800,000, while homes that are valued between 800 and a million, they may qualify for just a concession, but still discount, which is great.

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The eligibility criteria for this?

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Pretty simple.

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You just need to be buying a new existing home or vacant land in NSW.

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Makes sense.

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The property must be valued within the threshold which I mentioned previously.

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You or your partner must not have owned any property previously in Australia.

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At least one of the home buyers must be an Australian citizen or permanent resident, and you need to live in the property within 12 months from settlement date for 12 months consistently after that.

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Their second grant is also called the first homeowners grant and it's also $10,000 of cold hard cash that can go towards the purchase price.

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But like all good things, there is criteria and you need to be buying or building a first home.

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It needs to be a new home that no one has lived in before.

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So again, no established or existing properties.

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Unfortunately it needs to be worth no more.

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More than $600,000 if it's a first time sale.

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So let's just say an apartment that's finished being built.

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If it is a house and land package, then it needs to be no more than 750,000, which makes this pretty useless in Sydney.

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Again, you must live in the property as your owner occupied within 12 months of settlement and then stay there for 12 months consistently.

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At least though, on the positive side, there is no income restrictions like there is in Victoria.

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They did just have their own version of the shared equity scheme.

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Their one was called the Shared Equity Homebuyer Helper Scheme.

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Unfortunately, this was a pilot program and this is now closed.

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So too bad, too sad for you on that one.

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Hey guys, sorry to interrupt your regular listening.

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We're just going on a small intermission.

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If you're enjoying today's episode, we have many more just like it.

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I'd recommend listening to episode 15, part one of your complete guide to the first homeowners grants, or episode 12, Renters versus Reality playing game in the housing market.

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That's intermission over.

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Now back to the show.

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Moving on to sunny Queensland, they've got two programs.

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They've got FOG again.

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So the first homeowners grant.

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This one though is huge.

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They give eligible first home buyers $30,000 to go towards.

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A new home or building a new home in Queensland.

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So criteria which pretty much the same as the other places needs to be a new home either newly constructed or first time sale.

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So again no existing properties have for the Australian citizen.

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There is no income restrictions has to be your owner occupied property.

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And you need to have moved in to the property within 12 months of settlement and then lived there for only this time six months consistently.

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I like this one.

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This is some decent cash.

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The second one is called their first home stamp duty concession.

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Well, this is another awesome concession or scheme that they've got running.

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They have concessions on stamp duty for owner occupied properties and for first home owners.

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The first time concession only applies to homes, though there are up to $800,000 and that is a $24,500 saving above 800,000.

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You can still actually get a concession, which is great, but you need to go onto their online calculator to figure out what it is cause it varies based on the value of the property.

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Just go to their state revenue office website to find that calculator.

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The criteria is.

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Basically the same as the first homeowners grant, but the property this time can actually be established, which is awesome.

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I know everyone forgets about SA, so let's do them next.

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They've only got one program.

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They've got their fog.

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So first homeowners grant program.

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This one is for $15,000.

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The criteria here is they need to be purchasing a new home that has not been previously occupied or sold.

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So again, no established property, unfortunately.

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At least one applicant needs to be an Australian citizen or PR.

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You and your spouse has not held any relevant interest in an Australian property prior to July 1st, 2000.

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All applicants must reside in the property within 12 months of settlement date and stay there for six months consistently.

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And that's it for SA.

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OK, we're up to WA now, the workhorse of the country.

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They've got a fog, stamp duty concession and a shared equity scheme.

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Their scheme, that shared equity scheme is called Keystart.

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We'll go through that.

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It's um, it's pretty much like a dog's breakfast.

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I wouldn't touch it.

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Their first homeowner grant, uh, the fog is a $10,000 payment.

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Good thing is here is there's no income or asset tests to qualify for this.

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Needs to be a new home though.

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So unfortunately again, no established properties.

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At least one applicant needs to be Australian citizen or permanent resident and you have not owned property before.

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There are caps on the property value, but because WA is so goddamn large, they essentially split the state in two.

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Now everything in the South that would include all your metro areas.

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The property must not exceed 750,000 and anything in the north must not exceed $1,000,000.

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So they obviously want to push you into the north side to get more people over there.

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Needs to be your owner occupied property and like the other states, you need to move into it within 12 months of the settlement date and then live there for at least six months consistently.

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Their stamp duty concession is called the first homeowner rate.

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I don't know who comes up with these names.

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They're so confusing.

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They're just ridiculous.

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Just call it something what it is.

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But anyway, the first homeowner rate, not to be confused with the first homeowner grant.

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But anyway, the first homeowner rate is a concession on your stamp duty fee.

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The criteria here is that the value of the property must not exceed 600,000, but there is no duties payable if the value of the property is below 450,000.

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So basically it's no duty up to 450 and then there's a concession or a discount.

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For anything between 450 and 600,000 and if you're buying over 600,000 then no soup for you.

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Now WA's shared equity scheme.

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This is a dog's breakfast.

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Have a listen to this.

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So the government will buy up to 30% of your property value, so you own 70%.

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You only need a low, low 2% deposit and then obviously there'll be no LMI.

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But your property is Co owned with the state government.

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Big issues here is that you can only buy the properties that are available on this particular website.

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So it's not all properties, it's just some random properties that they have on this website.

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And then there is only one lender you can go to.

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The lender is called Keystart and the rates are redonkulous.

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They're about 1 1/2 to 2% higher than a regular bank's rate.

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These types of programs, uh, honestly, they're only really there for people doing it tough.

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Just don't touch these.

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Stay away from it.

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Now let's not forget about little old Tassie.

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Tasmania has a $10,000 first homeowners grant.

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These are for new homes not previously lived in, first time sale, etcetera.

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Same criteria as all the other banks, Australian citizen or PR owner off purpose, blah blah blah.

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There is no income or transaction size limit, which is great.

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I don't expect you guys to remember all of these.

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There's a lot going on there and a lot of information that I've just plowed into you.

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But if you do take something out of this that the governments will update these year on year.

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So every year there'll be a new update.

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To keep up to date with all this stuff, remember to go to Google and type SRO.

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That stands for the State Revenue Office and then type in your state code.

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So Vic, VIC, Queensland, QLD, etcetera.

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And then it will take you to the very first search result, which will be your state's State Revenue Office website.

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That was a mouthful.

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Anyway, so I hope you guys learned something today.

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If you need help, feel free to reach out via our website or our socials.

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We can point you in the right direction.

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And don't forget that there's free money out there.

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Don't leave it on the table.

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Someone else will take it.

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Thank you very much guys for listening to another episode.

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Don't forget to like and subscribe and share it to your family and friends if you like the episode.

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And as always, you stay classy and I'll see you at the next one.

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If you have a question that you would like answered on the show about budgeting, mortgages or finance, then drop us a line either via our socials, e-mail or website.

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Details available in the show notes.

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Any opinions and views expressed in this program are just that, opinions.

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All information is general in nature and should not be seen as financial, economic, legal, investment, accounting or tax advice.

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This program makes no representation or warranty as to the accuracy or completeness of any information contained in this program.

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You should consult a professional advisor in relation to your own personal circumstances.