NSW FIRST HOMEOWNERS GRANT 2016: How exactly does it work and how much do you get? - Pearl Financial

NSW FIRST HOMEOWNERS GRANT 2016: How exactly does it work and how much do you get?

By Shane | First Home Buyer

Sep 29

Thinking about buying your first house? Before you can venture the journey to home-ownership, you have to consider some important steps- from finding the ideal location to financing your purchase. If you’re a first-home buyer, you probably know that you’re eligible for government assistance, generally known as first homeowner grant (commonly referred to as FHOG). The process is similar across Australia, but there are differences for each jurisdiction.

Check out these articles for the latest on the first home buyer entitlements:

NSW First Home Buyers Assistance Scheme

The NSW First Home Owner Grant (New Homes) Scheme

In all states, you have two options when applying for a grant. You can submit your application through an authorised agent, which is the bank or financial institution providing your mortgage, or you can download the application form, complete and submit it yourself with the authorities once you have completed the sales transaction.

You’ll also need to present your supporting documents to the government to confirm that you’re qualified, including the deed of sale, contract to build, and proof of your identity. If you apply through a lending institution, grant payments will mostly be available for settlement or the first construction progress payment, if you apply directly to the government agency, more likely that it will pay the grant into your bank account when your purchase is complete.

Your qualification is determined on the facts and circumstances as at the start date of the acceptable transaction.  This is the date of the settlement to purchase or build a home or, for an owner builder, the date the groundwork commenced to be laid.

According to the NSW Office of the State Revenue, the following qualification criteria includes that each applicant must be at least 18 years of age and a natural individual, not a company or trust; at least one applicant must be a permanent resident or an Australian citizen; all applicants including their spouse must not have previously owned a residential property jointly, separately or with some other individual in any state or district of Australia before July 2000; each applicant has entered into a settlement for the purchase of a house, or signed a settlement to build a house on or after 1 July 2000; at least one applicant will occupy the house as their main residence  for a continuous period of 6 months, starting within the 12 months of settlement or construction of the house.

Moreover, the total value of the property does not exceed the cap amount. The cap amount is reviewed every year and the cap relevant to your application is determined by the start date of the acceptable transaction.

The grant amount is $10,000 for qualified transactions made on or after 1 January 2016. As a first time home buyer, you may be entitled to one of the NSW government’s home buyer grants or concessions. In NSW, a grant for new homes purchased for $650,000 or less is given.

There are also exceptions from transfer stamp duty in new homes valued up to $550,000 and vacant land up to $350,000, as well as deals for new homes valued between $550,000 and $650,000, and vacant lot valued between $350,000 and $450,000.

Finally, consult with a financial expert when you’re starting the application.

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About the Author

Shane specialises in helping Gen Y professionals and business owners make an impact by accumulating more assets, generating more income, and having more time to enjoy life. He has a Master of Applied Finance, an MBA, and a Master of Financial Planning. He is also a terrible golfer.

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