What do you need to know before applying?

What do you need to know before applying?

Making a move into your local property market as a first time buyer can be a daunting, difficult task. After all, these are massive investments that take a huge amount of time and financial commitment. For example, saving up the 20 per cent deposit needed is a huge amount of money. Luckily, there are financial aids provided by Australia's state governments that help facilitate the number of new buyers moving into the market.

Known as First Home Owner Grants (FHOG), these funds can be the saving grace for new home buyers. While the grant amount and application criteria varies from state to state, the opportunities opened by these finances cannot be ignored. If you're interested in applying for your own FHOG, here are some things to know before proceeding.

What are the basics of applying for a FHOG?

The first thing you need to know about applying for a FHOG is that you aren't eligible for the funds if you've ever owned property in any state in Australia before. This is to keep the funds available for those who need them for their first home, in order to keep things fair and transparent.

Furthermore, applicants need to be over the age of 18 when applying and hold Australian citizenship. You must also apply for the funds as an individual, not as a company or trust. Furthermore, the application for the FHOG must be made within 12 months of construction completion or settlement in the home - which means you can apply for reimbursement after purchasing.

Finally, after securing the grant and purchasing your first piece of real estate, the property must be your primary place of residence for a minimum of 12 months. However, these are the broad criteria for applications - each state has more specific grant amounts and application characteristics to be satisfied before allowing people to receive the FHOG.

State specific FHOG criteria

One thing to remember is that many states only offer FHOGs for the purchase of new homes or the construction of property, phasing out the buying of older, established properties. For example, since July 2013 the FHOG can no longer be used for established properties in Victoria. However, the fund amount has been increased to $10,000 for new home or construction projects, which is a significant amount towards buyer goals.

Furthermore, New South Wales offers a $15,000 grant for property, with this amount dropping down to $10,000 on 1 January 2015. However, one thing to keep in mind in the state is that the property cannot exceed a value of $750,000, as well as being a new home or construction project.

Going against the grain is Western Australia. While the state government offers a $10,000 grant for new property, there is also a $3,000 grant to facilitate the purchase of an existing, established property. This could be a great option to consider for those looking for an older, more distinguished homes.

The largest fund available in Australia was the Tasmanian First Home Builder Boost, which provided buyers with a huge $30,000 towards their property needs. However, this offer only existed until 31 December 2014, so check with the Tasmanian Government for an update.

Finally, the Northern Territory is currently offering $26,000 for the purchase of new homes or established properties in non-urban areas, and $12,000 for established homes in urban regions. These figures will only last until 1 January 2015 however, when established properties will no longer be eligible for funding.

These are the basics of applying for a FHOG in Australia. For more specific help, get in touch with your local Tax Office to discuss the specifics of your own application and start on your way to purchasing your first home today.

Image credit: Rental Realities

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