FHO Grant Explained

FIRST HOME OWNERS GRANT QLD 2019

Welcome to Quantum’s guide to the First Home Owners Grant QLD in 2019.

You will get a simple breakdown of the $15,000 First Home Owners Grant, what you can qualify for right now and what will work even better in 2019.

If you’re looking for answers on the First Home Owners Grant in Queensland, this guide is for you.

CHAPTER 1:

Is the first home owners grant still available in QLD?

 

Yes, the $15,000 First Home Owners Grant is still available in Queensland. For home buyers who have signed a contract to purchase a new home, or a contract to build a home with a builder from 1 July 2018 and will be available into 2019.

The amount of the first home owners grant in Queensland depends on when you signed the building contract:

How much is the first home buyers grant QLD?

$15,000 First Home Buyers Grant

$20,000 First Home Buyers Grant

Cost saving on stamp duty

Buying a new home

Yes, if contract signed after 1/7/2018

Yes, if contract signed between 1/6/2016 and 30/6/2018

Yes

Buying a new home

Yes, if contract signed after 1/7/2018

Yes, if build contract signed between 1/6/2016 and 30/6/2018

Yes

Buying an established (or existing) home

No

No

yes

 

For a home to be considered new, the Office of State Revenue will need confirmation that the property has not been previously lived in, has not been previously sold as a place of residence and can be a substantially renovated home.

How do I get the $15,0000 First Home Owner grant?

 

 

The first home owners grant amount depends on when you signed the contract for your new home or construction build.

If you signed a contract to buy a brand new home, or build a new house between 1st June 2016 and 30th June 2018 you are eligible for $20,000 first home owner grant. However, if you signed the contract to build or buy after 1 July 2018 you are eligible for $15,000 first home owner grant.

 

CHAPTER 2:

What are the first home owners grant rules in Queensland?

 

The most important qualifying rule for the first home owners grant is that you have never owned a property, or a part of a property in your personal name in Australia before.

If you are purchasing a brand new home, it needs to be valued less than $750,000 and the property cannot have been lived in before.

On the other hand, if you are building a new home you need to purchase the block of land as per normal, and then when signing the building contract the value of the home including the land needs to be less than $750,000.

You need to live in the property as your main home for at least 6 months straight within the first 12 months of owning (or building) it.

How do I get the $15,0000 FIRST HOME OWNERS GRANT?

According to the Queensland Government, to be eligible for the  first home owners grant you must:

  • You must be at least 18 years of age.
  • You must be an Australian citizen or permanent resident (or applying with someone who is).
  • You or your spouse must not have previously owned property in Australia that you lived in.
  • You must be buying or building a brand new home.
  • The value of the home including the land is less than $750,000.
  • You must move into the new home as your principal place of residence within 1 year of the completed transaction and live there continuously for 6 months.

 

Can a First Home Buyer Grant be Used as Deposit?

Yes, you can use your $15,000 first home owners grant towards your deposit.

This allows you to start building faster or purchase a property quicker.

The only caveat is that not all banks will consider the first home owners grant as genuine savings, so you may need to contribute some extra cash towards your deposit which can be a few thousand dollars depending on the build price.

Quantum has helped many to get a loan, and guiding you through the steps to buy your home, or even help with building a home including:

  • Finding, and buying your block of land
  • Getting your builder’s contract signed, and what to look for (and what to look out for)!
  • Helping get your home loan approved, we calculate what you can afford to pay each week and arrange a bank valuation for you at no cost to you!
  • Managing payments to the builder from the bank, to make sure your home is built quickly and easily.

If you want to understand how much deposit you need to buy a place, speak with one of our Wealth Advisors 1300 799 006.

CHAPTER 3:

Eligibility for the $15,000 first home owners grant?

 

You can take our eligibility tester to see if you can apply for the $15,000 home owners grant.

The rules of the first home owners grant to apply to both you as the applicant, your age, residency status if you have received the grant before and the type of property you are looking at buying or building.

Step by step.

1.  Previous home ownership  

The first home owners grant was created to help people into their first home, so you cannot have owned (or partially owned) property in your personal name previously.

This also applies if you are buying your first home with your spouse, or partner, they are not allowed to have owned property before in Australia.

If you’ve owned property before and lived in it you may not qualify for the first home owners grant.

Unfortunately, if your partner has owned a property before and they fall under the Queensland Government’s definition of partner (you are married, or living together on a ‘genuine domestic basis’ for 2 years or more) you may not be eligible for the $15,000 first home owners grant.

If this is the case while you might not be able to apply for the $15,000 grant, you might still be able to apply for a stamp duty rebate.

2. The type of property

To qualify for the first home owners grant QLD you need to be buying a brand new home, or building a new home – it does not apply on existing properties or ones that have been lived in before.

The type of property affects if you will receive the first home owners grant QLD.

The Queensland Government defines substantially renovated properties as involving structural building work such as:

  • replacing or altering foundations
  • replacing or altering floors or supporting walls (interior and exterior)
  • lifting or modifying roofs
  • altering brickwork to replace existing windows and doors

They do not consider a home to be substantially renovated if only cosmetic work like painting has been done, or a new kitchen has been put in for example.

3. Your property purchase value

Regardless of buying a brand new home, or building one the total value of the property needs to be under $750,000 to be eligible for the grant.

The only complexity with this is if you are building, where the total costs of your land added to your building costs (plus any additional variations like fences, solar panels, landscaping, etc) need to be under $750,000.

For example, if you paid $350,000 for a block of land, the build price was $400,000 and landscaping cost $50,000 your total purchase price or property value would be $800,000 and you would be ineligible for the grant.

To qualify for the first home owners grant QLD your property needs to be valued less than $750,000.

For example, if you paid $200,000 for your land and total build price was $244,000 your total property value would be $444,000 and you would be eligible for the $15,000 first home owners grant.

4. Your age and need to be an Australian Citizen (or permanent resident)

To qualify for the first home owners grant in Queensland you need to be at least 18 years old, and you (or your partner) needs to be an Australian citizen or permanent resident. In either case, as with point 1, you and your partner cannot have received the Queensland First Home Owners Grant or any other home ownership grant in Australia.

 

First Home Owner Grant – Case Study

 

In order to get a better understanding of the entire process, let’s take a look at an example. 

You and your partner currently live in a rented apartment and planning to buy your first home. You are trying your best to save as much money as you can and be eligible for a $15,000 first home owner grant.

Different types of properties, including off-the-plan, under-construction property, and a new house (construction completed) can qualify for first home buyers grant.

Below are the eligibility criteria for these properties:

  • Off-the-plan – It includes the projects where no construction has taken place yet but they qualify for construction.
  • Under Construction – It includes those properties where the construction is still underway and not yet completed.
  • A Newly Constructed Property – You will qualify for a $15,000 grant if the construction of the property has been newly completed. In addition to that, you also fulfill the criteria of first home buyers grant.

So far, you have saved $20,000 and plan to secure at least a 5 per cent deposit. You plan to buy a property for $460,000, then you need to save $3,000. If you manage to save the required deposit and sign the agreement before the year ends, you become eligible for the grant.

 

What other options are there for first home Owners?

If you have not owned property before, you could be eligible for the First Home Super Saver Scheme. This allows you to make extra payments to your superannuation account, and in effect helps you save money for a deposit faster as you pay less tax.

 

Is it possible to have the grant taken off you?

Yes, we have seen cases where you can qualify for and get paid the grant but if you do not abide by the rules the government can force you to repay the grant.

You need to understand your obligations in receiving the first home owners grant and make sure you:

  • Move into the home within 1 year of buying it.
  • Live in the home as your principal place of residence for 6 months continuously.
  • Tell the office of state revenue within 14 days if you are unable to move into the home, or have to move out of the home before you have lived there for 6 months continuously.

CHAPTER 4:

Can you get the First Home Owners Grant on established homes?

 
 

If you are a first home owner in Queensland looking at buying an established home, you would be ineligible for the $15,000 first home owners grant.

But you are able to claim the first home concession for transfer duty (also known as stamp duty)!

You will not receive the first home owners grant, but you can save up to $8,750 in stamp duty concessions as a first home buyer on established home purchases up to $500,000.

 

How much do you save with Stamp Duty Concessions?

First Home owners then pay a concessional stamp duty amount on purchases up to $550,000 and then over $550,000 there are no additional concessions or discounts.

This can be on both established units, and existing houses, here are a few examples.

Purchase Price

Stamp Duty (also known as transfer duty)

Stamp Duty Paid by First Home Owners

Amount Saved on Stamp duty with rebate

Up to $500,000

$8750

$0

$8,750

$525,000

$9,625

$5,250

$4,375

$550,000

$10,600

$10,600

$0

$600,000

$12,850

$12,850

$0

$650,000

$15,100

$15,100

$0

$700,000

$17,350

$17,350

$0

 

What are the rules with the First Home Owners Transfer Duty Concession?

The requirements of the first home owners transfer duty concession are slightly different to the first home owners grant.

With the first home owners grant you need to live in the property for 6 months continuously within the first 12 months of moving. And then if you want you can move out, rent the property, sell it etc.

With the First Home Concession, you cannot dispose of (i.e. sell, must live there) or rent out any room in the property for 1 year.

So if you qualified for both the First Home Owners Grant, and the First Home Concession you need to be aware that you need to live in the property for at least 1 year, and cannot rent out any rooms (including AirBNB ).

CHAPTER 5:

How do I apply for the first home owners grant?

 

If you apply for a home loan through Quantum we will help you complete the application for the $15,000 first home buyers grant along with all the supporting documentation.

When you apply for the Queensland First Home Owners Grant you will need to provide your supporting documentation like your contract of sale, along with the original application form (you can also download the First Home Owners QLD form here.)

How TO complete the first home owners grant application form?

If you work with Quantum we will help you complete the First home owners Grant application form as a part of your home loan application.

The First Home Buyers Application Form is 15 pages long, and have 7 main sections:

Section 1: Eligibility Criteria

The first section of the First Home Buyers Application form for the Queensland First Home Owners Grant checks that you are able to apply for the grant.

In the example below, a qualifying first homeowner will answer yes to questions 1 to 7, and then no for questions from 8 onward.

Section 1 of the First Home Owners Grant application form has the qualifying questions.

 

Section 2: Applicant Details

This section of the application form has all your basic personal information, name, address, contact details all the simple stuff for both you, and your partner. If there are more than 2 applicants you can just add an additional form.

Section 2 of the First Home Owners Application in Queensland has your basic contact information.

 

Section 3: Spouse Details

Section 3 is only there if you have a partner or spouse who is not an applicant that you detailed in section 2. If you do not have a partner or spouse you can skip this section and continue to section 4!

 

Section 4: Property and Transaction Details

In section 4 you will need to include the details of the property you are purchasing, or building as well as the type of property.

Section 4 of the First Home Owners Grant Application QLD has the property details.

The options in section 4 include the below, only choose 1 option.

  • Contract to purchase a new home
  • Contract to purchase a substantially renovated home
  • Contract to build
  • Contract to purchase off-the-plan
  • A building as an owner-builder

Buying off the plan means you are purchasing a property before the building is out of the construction phase, and the title has yet to be created.

If you are buying off the plan it means the property is not completed yet, so if you have bought a new property that is ready to be moved into you can choose ‘contract to purchase a new home’.

 

Section 5: Optional Information

As the name suggests this is not a mandatory section, and only applies if you are Aboriginal or a descendant from the Torres Strait.

 

Section 6: Declaration by Applicant 

This section is where you need to sign the application form, and it needs to be witnessed by someone who isn’t an application.

 This section of the First Home Owners Grant QLD application form is for signatures.

 

Section 7: Declaration by Spouse 

When you are applying with a partner or a spouse, this is the section that they sign. Same as the above, their signature needs to be witnessed by someone that isn’t you.

What supporting documents do I need?

The specific documents required will depend on your individual situation, and we will have the majority of these documents from your home loan application so chat to us before getting home together.

 You will need to provide a few additional documents to apply for the First Home Owners Grant like your identification.

To give you an idea, to apply for the first home owners grant QLD you will need:

  • Completed First Home Owners Grant Application form
  • Proof of Identification – Australian Passport, Drivers License or Birth Certificate
  • If you are buying a new home 
    •  A contract signed and dated by seller and applicants
    • Registration confirmation statement that shows the applicants as the registered owners (or title search)
    • Final inspection certificate.
    • The Office of State Revenue sometimes also require confirmation from the seller the property has not been previously occupied.
  • If you are building a new home 
    • A contract signed and dated by builder and applicants
    • Registration confirmation statement that shows the applicants as the registered owners
    • Final inspection certificate.
    • The Office of State Revenue sometimes also require additional documents like the bank valuation, rates notice or stamped contract to buy vacant land.

The First Home Owners Grant application also asks for evidence on the valuation of the home, if you have been gifted a deposit they may require a statutory declaration if a related person is giving financial help or a certified copy of your marriage certificate.

As mentioned the exact documents required are different for every application, so chat with our team and we can help make this as simple as possible.

BONUS

 

First Home Buyers Scheme – 95% No LMI government grant?

In the lead up to the 2019 election, both sides of government have announced their support to a new First Home Buyers Scheme set to launch in January 2020.

The First Home Buyers Scheme will allow home buyers with between a 5-19% deposit the chance to get a guarantee from the government, and avoid Lenders Mortgage Insurance saving you tens of thousands in extra fees! 

While there are limited details available at the moment, it looks like the scheme will work like a guarantor home loan where you will still borrow 95% (as an example) from the bank and instead of paying Lenders Mortgage Insurance the government will provide a guarantee to your bank.

While the obvious positives to the scheme are helping first home buyers save tens of thousands in Lenders Mortgage Insurance costs, there are some potential downsides.

  •  The government scheme will be restricted to 10,000 first home buyers each year, which as an example only works out to be 10% of the total 110,000 first home buyers in Australia in 2018.
  •  The interest rates on these loans could be higher,due to the banks not being able to get insurance to protect them.
  • The guarantee is set to last as long as you hold your property, or until you refinance your property.
  • It can save you tens of thousands, as an example a $400,000 purchase with a 5% deposit would normally cost between $13,047 and up to $17,512 in LMI.

The other unknown is how this new first home buyers grant could create more demand and push prices up for first home buyers. According to research by the Deakin University:

In 2010 the First Home Owners Grant was increased by $7,000 to $14,000 for an existing home and increased to $21,000 for a new home. Since the introduction of First Home Owners Grant, property prices have directly increased by over $57,321 or 18.8% since its introduction.

This is an abridged article. The full article is available at: (https://www.huntergalloway.com.au/first-home-owners-grant-qld/) 

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