To help first home buyers get into the market sooner, both the federal and state/territory governments have introduced a raft of schemes and incentives. One of those is the First Home Owners Grant, a nationwide program designed to support buyers by providing a one-off financial grant. Here’s how it works, and how you might be able to take advantage of it.

What is the First Home Owners Grant?

The First Home Owners Grant - referred to as the FHOG for brevity's sake - is a national initiative funded and administered by the states and territories.

The scheme aims to offset the impact of the Goods and Services Tax (GST) on home ownership and encourage more Australians to enter the property market, by providing a one-off financial grant to eligible first-home buyers in Australia.

All states and territories (ACT excluded, and NT with a larger $50,000 grant) have access to the FHOG, providing access to $10,000 - $30,000 to help purchase your first home. Additionally, home values must not exceed a range from $600,000 - $750,000 in New South Wales, Victoria and Queensland.

The scheme is frequently paid directly to lenders and used as part of a deposit or settlement fund. However, it can be used to offset your mortgage and be accessed after you've purchased a house (depending on how long you've lived in it).

Who’s eligible?

Now, the scheme does come with some fairly stringent criteria. These requirements differ across states and territories, but common requirements are:

• The grant is only available to first-home buyers. You - and any spouse or partner - must not have owned residential property before.
• You can only receive the grant once.
• You must be an Australian citizen or permanent resident (may vary by state or territory).
• You must be a ‘natural’ person (companies and trusts are not eligible).
• You must live in the house the FHOG was used on, for at least 6 continuous months, once it's renovated or built.
• The minimum age requirement for most states and territories is 18.
• Most likely, the property must be new or 'substantially renovated', and not previously sold or occupied.

How much can I access?

The grant amounts and property value caps vary by state and territory. For instance:

• New South Wales (NSW): A $10,000 grant is available for first-home buyers purchasing or building a new home valued up to $600,000, or up to $750,000 for land and building contracts.
• Victoria (VIC): A $10,000 grant is offered for new homes in metropolitan areas, with higher amounts available for regional areas, for homes valued up to $750,000.
• Queensland (QLD): A $30,000 grant is available for new homes valued less than $750,000. ( After 30 June 2025, the grant amount will revert to $15,000)
• South Australia (SA): A $15,000 grant to purchase or build a new home that has not been previously occupied or sold as a place of residence.
• Western Australia (WA): A $10,000 grant to purchase or build a new home that has not been previously occupied or sold as a place of residence.
• Tasmania (TAS): A $10,000 grant to purchase or build a new home that has not been previously occupied or sold as a place of residence.
• Northern Territory (NT): HomeGrown Territory Grant of $50,000 replaces the FHOG.
• Australian Capital Territory (ACT): FHOG not available.

What kinds of properties can I buy?

The FHOG initiative also has somewhat strict rules about the type of property you buy and its value.

First up, the property has to be residential. The types of properties that qualify for the scheme include:

• Newly built homes
• Substantially renovated homes
• House and land packages
• Owner-built homes

Price caps depend on which state or territory you’re in. The price cap you’re subject to also hinges on whether you plan to buy in a major city/regional centre, or somewhere further out. To give you an idea, properties must be:

• New South Wales (NSW): For newly built homes (houses, townhouses, apartments, or units) or substantially renovated properties, the purchase price must be $600,000 or less. If buying vacant land with a contract to build, the total combined cost cannot exceed $750,000.
• Victoria (VIC): The grant applies to newly built homes, off-the-plan purchases, and construction contracts, provided the total contract price does not exceed $750,000.
• Queensland (QLD): The grant applies to newly built homes, off-the-plan purchases, and construction contracts, provided the total contract price does not exceed $750,000.
• South Australia (SA): The grant is available for new homes, off-the-plan apartments, substantially renovated properties, owner-builder projects, and construction contracts, with no price cap.
• Western Australia (WA): The scheme applies to transactions below $750,000 for properties south of the 26th parallel and below $1,000,000 for properties north of the 26th parallel. This includes purchases of new homes, comprehensive building contracts, and owner-built properties.
• Tasmania (TAS): The grant is available for new homes, off-the-plan apartments, substantially renovated properties, owner-builder projects, and construction contracts, with no price cap.
• Northern Territory (NT): The HomeGrown Territory Grant has replaced the FHOG.
• Australian Capital Territory (ACT): The FHOG is no longer available in the ACT.

How can I apply?

So, how can you apply for the FHOG? Here are the basic steps.

1. Assess your financial situation: This is a crucial part of the process. Your financial situation determines how much you can afford to spend on housing. Review your income, expenses and debts. Calculate your borrowing power to see how much you could borrow for your first home. Determine how much you’ve accumulated for your deposit and your resulting loan-to-value ratio. Be prepared for the possibility of fluctuating interest rates, too.
2. Check your eligibility: This goes without saying. Make sure you tick all of your state’s eligibility requirements to access the FHOG.
3. Apply through your home loan lender: If you’re taking out a home loan, most lenders allow you to apply for the FHOG before settlement as part of the loan process. The grant can be paid directly to your lender and used as part of your deposit or settlement funds.
4. Provide the required documentation: To apply for the grant, you’ll need to provide several documents. If you require the funds for settlement or a first drawdown/progress payment, you must submit your application through the approved lender financing your purchase. If you’ve already completed your purchase or construction, you can apply via the FHOG customer portal. Additional required documents typically include proof of employment, identification, financial statements, and other supporting paperwork.
5. Submit your application: Once you’ve got everything in order, you’ll apply for the First Home Owners Grant through your chosen lender or the FHOG customer portal.
6. Wait for the outcome: Your chosen lender will let you know if your application is successful. The time this takes can vary between lenders, as each lender has their own time frame. Alternatively, if you have applied through the FHOG customer portal, they will let you know when your application is approved.
7. Buy your home (hooray!): Once the home is purchased and you enter into a mortgage agreement with your lender, the First Home Owners Grant will be made available to you.
8. If you’ve already purchased or built your home: If you’ve already purchased or built your home, you can still apply for the grant, but you must do so within a specific timeframe (which varies by state or territory).

How can I make the most of the First Home Owners Grant?

While the FHOG can be beneficial in its own right, there are several ways you could maximise your savings.

As you move through this list, bear in mind that we’re not making specific recommendations. These are simply some ways the FHOG could be utilised in tandem with other strategies. Always consider your own financial circumstances before making a decision and, if you think you might need individualised advice, reach out to a financial adviser.

Using the First Home Guarantee

The First Home Buyers Grant (FHBG) is a scheme that enables eligible buyers to purchase a home with a deposit as low as 5%, without paying Lenders Mortgage Insurance.

Under the FHBG, Housing Australia will guarantee up to 15% of the home's value, although they do not provide any money towards a deposit. The guarantee acts as a form of security for the lender if the borrower defaults, the same way a guarantor of LMI does.

In the 2024-25 financial year, there are 35,000 FHBG spots available.

Using the First Home Super Saver scheme

The First Home Super Saver (FHSS) scheme is a government-run initiative whereby you can make voluntary contributions to your super, then withdraw them to put towards your first home.

Under the scheme, you can make concessional (before-tax) contributions or non-concessional (after-tax). At the moment, you can contribute up to $15,000 per financial year and withdraw up to $50,000 in total.

If you make concessional contributions, contributions are taxed at 15% and could be used to lower your taxable income for the financial year you make them.

Opening an offset account

Some home loan providers let you open an offset account, which is a transaction account connected to your home loan. You can use it much like any other kind of transaction account – that is, making deposits and withdrawing from it whenever you need.

The difference, though, is that it can help you reduce the amount of interest you pay on your home loan. Say there’s $100,000 sitting in your offset account, and you have a home loan of $950,000. Instead of paying interest on the full $950,000, you’d only pay it on $850,000. And the higher your offset account balance and the longer the money stays in there, the less interest you’re likely to pay.

Capital gains tax exemption

Capital gains tax (CGT) is a tax you pay on an asset when you sell it for a profit, including property. You don’t have to pay CGT on your primary residence (i.e. your home) unless you’re renting part of it out. In this instance, you might have your exemption reduced.

However, it’s worth mentioning the CGT six-year rule. Under the rule, you can rent out your home and still consider it your primary residence for CGT purposes for up to six years. During that time, no other property can be your primary residence.

Using the NSW First Home Buyers Assistance scheme

The NSW First Home Buyers Assistance scheme is a state government initiative designed to help first-time buyers enter the property market by reducing or eliminating stamp duty costs. Under this scheme, eligible buyers purchasing a new or existing home, a vacant block of land, or a house and land package may receive a full or partial exemption on transfer duty, depending on the property's value.

As of July 1, 2023, first-home buyers in NSW can receive a full stamp duty exemption for homes valued up to $800,000 and a concessional rate for properties valued between $800,000 and $1 million. For vacant land purchases, full exemptions apply to land valued up to $350,000, with concessional rates available for land valued between $350,000 and $450,000. The savings from this scheme can significantly reduce upfront costs for first-time buyers.

Using the NT HomeGrown Territory Grant

The HomeGrown Territory Grant provides first-home buyers with $50,000 to help fund the purchase or construction of their first home. The grant replaced the $10,000 First Home Owner Grant, and is available for owner-builders, off-the-plan purchases, and new fixed transportable homes.

The final word

The FHOG could certainly be beneficial if you're looking to buy your first home and meet all the requirements. But it may not suit everyone's circumstances. And regardless of whether you go through the home-buying process alone or utilise the scheme, buying your first home is a major financial commitment. If you ever need guidance navigating the process, don't hesitate to reach out to a licensed financial adviser or mortgage broker.

Happy home-buying!