First Home Buyers

 
Courtesy of the relevant government departments are pleased to provide a guide to the options available to you in assisting with the purchase of your 1st home!

Please consult the relevant web site links as listed below to confirm your eligibility along with any further legislative changes and updates.

Who can open a First Home Saver Account?

The Federal Government’s First Home Saver Accounts, designed to help would-be homebuyers save a deposit, will come into operation from October. But who can have one and how do they work?

Anyone aged 18 to 65 can open a First Home Saver Account, so long as they haven’t previously purchased or built a first home in which they live and haven’t previously opened a First Home Saver Account.

The account holder will also need to provide their tax file number to the provider of the account.

The government says that thanks to government contributions and low taxes, a couple each earning average incomes and saving 10 per cent of their incomes into individual First Home Saver Accounts would be able to save more than $88,000 after five years.

Personal contributions can be made by the account holder or a parent or grandparent, but only from after-tax income.

The government contributes an extra 17 per cent on the first $5000 of personal contributions made into the account each year.

This means an individual contributing $5000 will receive a government contribution of $850. Earnings on account balances will be taxed at the account provider level at 15 per cent, rather than at the marginal tax rate of the account holder.

Banks, building societies, credit unions, public-offer superannuation providers, life insurance companies and friendly societies can all offer the accounts from October http://www.homesaver.treasury.gov.au/content/default.asp

First Home Owner Grant (FHOG)

If you are buying or building your first home, you may be eligible to apply for the First Home Owner Grant (FHOG). The FHOG Scheme is fully funded by the Western Australian Government and administered by the Office of State Revenue. The scheme was established to offset the higher housing costs associated with the introduction of the Goods and Services Tax (GST) on 1 July 2000 and offers a one-off payment for eligible applications.

General information

The FHOG is currently $7,000 or the amount that you must pay to purchase or build your home, whichever is the lesser amount.

The FHOG applies to residential dwellings only and does not apply to vacant land, business premises, holiday houses or renovations to an existing home.

There are no income or assets tests to qualify for the FHOG.

Please note: as of the end of October 2013 the amount of the FHOG will change to $ 3000 for established housing and $ 10,000 when building your home, consult web site as per link below to confirm.

How to apply

Application forms can be obtained from an Approved Agent or from www.finance.wa.gov.au. Most financial institutions are Approved Agents; however a list of Approved Agents is also available from web site.

An application for the FHOG can be made once a contract to purchase or build a home has been signed and dated by all parties to the contract and appropriately witnessed or, where the application is made as an owner-builder, when the foundations have been laid.

An application for the FHOG must be made within 12 months of completion of the eligible transaction. Applications may be lodged through an Approved Agent or with the Office of State Revenue.

If you are unsure where to lodge your form and are obtaining finance through a financial institution, please consult with them prior to lodgement to ensure that your form is sent to the correct place.

Eligibility for the FHOG

To be eligible for the FHOG, applications must satisfy the following eligibility criteria:
  • Each applicant must be a natural person (i.e. not a company or trust).
  • Each applicant must be 18 years of age or over at the commencement date of the eligible
  • At least one of the applicants must be an Australian citizen or permanent resident at the time of making an application.
  • Each applicant and/or their spouse3 cannot have previously received a FHOG under this scheme.
  • Each applicant and/or their spouse cannot have owned residential property anywhere in Australia before 1 July 2000.
  • Each applicant and/or their spouse cannot have previously owned residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence before 1 July 2004.
  • Each applicant and/or their spouse cannot have previously owned residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence for a continuous period of at least six months that began on or after 1 July 2004.
  • Each applicant must occupy the home being purchased or built as their principal place of residence for a continuous period of at least six months, commencing within twelve months of completion of the eligible transaction.
  • Each applicant must have entered into an eligible transaction on or after 1 July 2000. An eligible transaction is defined under section 14 of the First Home Owner Grant Act 2000, but is generally a contract for the purchase or construction of a home, or commencement of construction of a home as an owner builder.
  • For eligible transactions commencing on or after 1 January 2010, the total value of the home must not exceed the cap amount. The cap amount is:
  • $750,000 if the property is located south of the 26th parallel of South Latitude, or
  • $1,000,000 if located north of the 26th parallel of South Latitude.

Supporting documentation

Each applicant and their spouse are required to submit proof of identity documents with an application for the FHOG. This will include evidence that at least one applicant is an Australian citizen or permanent resident. Each application must be accompanied by documentary evidence of the eligible transaction. This may include a copy of the contract to purchase or build a home, or evidence of the costs incurred by an applicant to construct a home as an owner-builder. In some cases the Commissioner may require a copy of a valuation of the home.

Please refer to the Application Form and Lodgement guide for details of the requirements.

Residence requirement

To be eligible for the FHOG each applicant must occupy the home as their principal place of residence for a continuous period of at least six months, commencing within twelve months of completion of the eligible transaction.

If you are unable to satisfy the residence requirement you must notify the Commissioner in writing. Where you can clearly demonstrate that the reason for being unable to satisfy the residence requirement is exceptional, unforseen or for reasons beyond your control, the Commissioner may consider a written application to:
  • Reduce the time you are required to live in the home to a period of less than six months;
  • Extend the time allowed for you to commence residing in the home to a period of longer than twelve months; or
  • Where there are two or more joint applicants, exempt an applicant from the residence requirement.
The Commissioner will make a determination of the application and advise you whether you are required to repay the FHOG. Notification of your inability to satisfy the residence requirement must be given within 30 days of the expiration of the required twelve month residency take-up period, or the date it becomes apparent you will not be able to fulfil the requirement (whichever is the earlier).Failure to advise the Commissioner in writing may result in you being required to repay the FHOG with penalties, and also being ineligible for a future FHOG.

First home owner grant frequently asked questions

Visit http://www.finance.wa.gov.au/cms/uploadedFiles/_State_Revenue/FHOG/FHOG_Fact_Sheet.pdf

Home Buyers Assistance Account

The Home Buyers Assistance Account is established under the Real Estate and Business Agents Act 1978 to provide first home buyers with financial support.

The scheme provides a grant of up to $2,000 for the incidental expenses of first home buyers when they purchase an established or partially built home through a licensed real estate agent. On 22 September 2006, the maximum purchase price criteria for the Home Buyers Assistance Account was increased to $400,000 in response to the rising costs of housing in Western Australia.

The scheme is funded from interest paid on real estate agents' trust accounts. The grant can be used for - registration fees, solicitor and/or conveyancing fees, valuation fees, inspection fees, establishment fees, mortgage insurance premiums and lending institution fees associated with lodging the application.

The current criteria for a grant are:
  • the purchase price of the home is $400,000 or less;
  • you must be buying your first home, which is established or partially built (not vacant land or a 'house and land' package);
  • you or your spouse or partner must not own or have owned any property in the State of Western Australia before (if one of the people you are buying a home with, owns or has owned a home in Western Australia before, then you can apply for a partial grant based on the percentage of your ownership of the home);
  • you must live in the home for at least the first 12 months;
  • you must purchase the home through a licensed real estate agent;
  • the application must be lodged with the Department of Commerce no more than 90 days after the date that the offer and acceptance contract to buy the home is accepted (in exceptional circumstances, a short extension of time for lodgement may be granted if reasonable grounds exist); and
  • the home loan must be financed through an authorised lending institution (such as a bank, building society or credit union).
For more detailed information, please view:
http://www.commerce.wa.gov.au/ConsumerProtection/Content/Property_renting/Buying_and_selling/Home_Buyers_Assistance_Fund.html