Are you looking forward to purchasing your dream home but having difficulty doing so because it’s your first time? Luckily, there is a grant given by the government for first-time homebuyers so you, too, can get your hands on your very first residential property.
The requirements and other important information vary by the state, so if you’re planning on buying a newly constructed home in South Australia, then this is the guide for you.
From eligibility requirements to applications, here’s everything you need to know about the first homeowners’ grant in SA.
Table of Contents
- What is a First Home Owners Grant (FHOG)?
- History of the First Home Owners’ Grant
- How Does it Work?
- Price Limits for First Home Owners’ Grant SA
- How do I become eligible for the first home buyers grant?
- Factors that Make You Ineligible for the Grant
- How do I apply for the grant?
- The Essential Documents for First Home Owners’ Grant SA
- The Right Time to Apply for the First Home Owners’ Grant
- When Will the Grant Be Given?
- Other Important Things to Consider
- Frequently Asked Questions
- Can You Use the First Home Owners’ Grant to Buy Land?
- Can You Get the First Home Owners’ Grant if You’re a Permanent Resident?
- Can You Get the First Home Owners’ Grant SA Twice?
- Can You Apply for a First Home Owners’ Grant if You Own Vacant Land?
- If I Sell My Home, Do I Have to Refund the Grant?
- Is the First Home Bonus Grant Still Available in South Australia?
- Are You Able to Get the First Home Owners’ Grant if You’re Married?
- What if My Partner Has Already Received the Grant, But I Haven’t?
- Are We Still Eligible for a Grant if I/My Partner Has Previously Owned a Home?
- My Partner and I Broke Up. Can I Still Get Another Grant?
- Do I need to live in my new home immediately after buying to qualify for the grant?
- What is the First Home Owner Rate of Duty?
- What if I need the grant for the settlement of my home purchase?
- What is the difference between the First Home Owners’ Grant and the First Home Super Saver Scheme?
- Alternative SA Schemes or Grants First Home Buyers Can Use
- Zanda Wealth’s Final Thoughts
What is a First Home Owners Grant (FHOG)?
According to the Department of Treasury of Finance, the First Home Owner Grant or “FHOG” is paid by the State Government to eligible first home owners. The grant applies to the purchase or construction of a new residential property, including a house, flat, unit, townhouse, or apartment that meets local planning standards anywhere in South Australia.
The First Home Owners’ Grant SA was introduced back in 2000 in order to offset the Australian tax (GST) and help first-time buyers enter the property market sooner. The grant provides those eligible for it a lump sum amount of money as financial aid for purchasing a brand new home. It’s ideal for those who are purchasing a property with the intent of making it their primary residence.
History of the First Home Owners’ Grant
In Australia, the First Home Owners’ Grant began in 1964 with a grant amounting to $500–which equates to around $6,000 as of today. In order to counterbalance the effect of GST on home ownership, the grant was later approved to be increased to $7,000 by the Howard Government in 2000. Howard decided to incentivise construction a year later by doubling the grant to $14,000.
During the middle of the global financial crisis (GFC) in 2008, the Rudd government decided to enhance the grant as an attempt to further stimulate development with buyers who already had existing homes receiving $14,000 and new houses $21,000.
How Does it Work?
In the frame of this scheme, first-time home buyers (individuals or couples) can harness a single payment of $15,000.
This grant is your financial ticket to either buy or build a home in South Australia. You can channel this sum towards a deposit, accelerating your dream of either buying or constructing a new abode.
Current guidelines in South Australia stipulate that your chosen house should not exceed a valuation of $575,000. Another advantage? The grant isn’t influenced by your earnings, ensuring a wider range of accessibility.
Price Limits for First Home Owners’ Grant SA
Obtaining a first home owners’ grant means the individual is entitled to receiving at most $15,000 when they’re purchasing or building a brand new property. The value is subject to change, depending on the yearly budget set by South Australia, but currently, this is the updated amount.
In order to receive the $15,000 grant, the individual must buy or construct a new home valued at a maximum of $575,000. Fortunately, there’s no minimum purchase price, but make sure that the market value does not exceed the maximum amount.
To find out what makes you eligible to receive the grant, keep reading ahead.
How do I become eligible for the first home buyers grant?
There are a few requirements in order for one to be eligible to receive the grant. The first, most obvious and important requirement in order to get approved for the grant is that you must be a citizen or permanent resident of Australia. Additionally, you must be at least 18 years of age, as minors cannot legally make this decision.
If you are a citizen of New Zealand permanently residing in Australia, you can also apply, given the fact that you hold a Special Category Visa.
Moreover, you must purchase a new house that hasn’t been occupied previously or sold as a place of residence and includes a significantly renovated home. The property you plan on purchasing must be declared a “new home.” As mentioned previously, the home that you’re planning to acquire must be worth at most $575,000 in order to be eligible to receive the grant.
If you have a spouse or a partner, both of you must not have held a relevant interest in an Australian residential property prior to 1 July 2000. Furthermore, you and your partner should not have occupied an Australian residential property in which you had a substantial interest on or after the said previous date for six months or more.
Factors that Make You Ineligible for the Grant
While you need to consider the different eligibility requirements of applying for a first home owners’ grant, you must also be wary of the other factors that can result in the rejection of your application.
If you are not an Australian citizen or permanent resident, then for obvious reasons, you are not eligible to apply for a grant. The same goes for being under the age of 18.
You will also be considered ineligible if you have owned a home previously and you did not live in it for at least six succeeding months.
The type of property you plan to purchase also plays a massive role in getting approved for the grant. For example, if you are going to buy a property that’s not suitable for dwellings such as a townhouse or a flat, then you will get rejected. In addition, the grant is not available for renovations of existing properties or buying an empty lot.
How do I apply for the grant?
There are two ways to be able to apply for the first home owner’s grant. You can apply through banks or lenders or the office of the state of revenue of South Australia.
Bank/Lender
The most common way for people to apply for the first home owners’ grant is through their lender. The lenders act as approved agents on behalf of the state government and will go through the payment process of your grant using your loan funds.
If you want to receive grant funds as soon as possible, then this option is the best way to do so. In order to apply, you just need to submit your accomplished first home owners’ grant form and additional documents to a lending institution or an approved bank. The entire process would generally take at most ten working days.
You may book a free strategy session with us to help you get started on your property journey and provide further details about the First Home Owners’ Grant.
South Australia Office State of Revenue
To apply through the South Australia Office State of Revenue, you would have to pay a visit in person or mail your accomplished first home owners’ grant form along with the supporting papers to the office. The application is processed within 10 days once it’s been received.
The Essential Documents for First Home Owners’ Grant SA
First and foremost, you must submit a certified copy of the contract with every application form–this is true for all states in Australia. In terms of identification requirements, below is a list of what you need to present if you’re applying for a first home owners’ grant through a lender.
For Australian citizens:
- Australian birth certificate issued by the Registry of Births, Deaths & Marriages, OR
- Australian citizenship certificate, OR
- Australian passport
For New Zealand citizens:
- Current passport
Keep in mind that New Zealand citizens must be residing in Australia at the time of the completion of the eligible transaction.
For other citizens:
- Current passport
- Evidence of permanent residency or a permanent resident visa
Take note that there should be at least one applicant who holds permanent residency status or citizenship of Australia.
Additionally, here are some instances where you may be required to submit additional supporting papers:
- If married, a certified copy of your marriage certificate
- If divorced, a certified copy of your divorce certificate
- If widowed, a certified copy of your spouse/partner’s death certificate
- If separated, a statutory declaration with the relevant information such as the name of your former partner/spouse, the date of your marriage or when the domestic relationship began, the date of separation, your previous spouse/partner’s address (if known), and a statement to the result that you no longer live together and have no plans of resuming cohabitation.
- If you changed your name, a certified copy of your name change certificate
The Right Time to Apply for the First Home Owners’ Grant
When applying for the first home owners’ grant, there’s a firm time span to be followed depending on your situation. Be sure to apply at the right time in order to get your application approved.
If you don’t know exactly when to apply for the first home owners’ grant, here are some example situations to help you determine the right timeframe for you.
While Buying a Home
Once you purchase your new home and registered the title, you have to apply within 12 months in order for the grant to be eligible. Otherwise, it will be considered invalid because it’s not within the timeframe.
When There’s a Contract to Build
If you have a contract to build, then it’s crucial for you to apply within one year of the house being completed. For example, if the final inspection certificate is being issued.
If You’re an Owner-builder
Should you decide to take full responsibility for the construction of your own home as an owner-builder, then you have to apply within one year of the home’s completion or within 12 months of the issuance of the final inspection certificate.
When Will the Grant Be Given?
You’ve sent in your application, and you got accepted. Congratulations! Now what? You’re probably wondering when you’re going to be receiving the approved grant. Here are some possible scenarios on when you’ll be given your grant.
Approved Agent
If you applied for the first home owners’ grant through an approved agent, the grant would be paid in one of the following three situations–the first being on the day of the settlement while in the process of buying a new home or an off-plan property. The next situation is when the approved agent has been provided with the application form, supporting documents, and confirmation that the house is finished and ready for moving in.
Now, if you have a contract to build, then it’ll be on the date of the first initial progress payment by the approved agent.
RevenueSA
If you’re applying through RevenueSA, the grant will be paid within five days after approval of the application and the evidence has been provided, showing that the settlement has taken place while purchasing a new or off-plan property. If you have a contract to build, then the grant should be paid within five days after the application has been approved and all the supporting documents providing foundations have been laid.
Generally speaking, the grant is paid once the ownership transaction gets completed. And, if you’re constructing your own property, the grant is given once the construction process begins.
Keep in mind that you can use the grant as part of the deposit, but again, the grant won’t be released so soon. Additionally, the grant will most definitely not cover the entire deposit for your new home.
Other Important Things to Consider
Now that you have a general idea of how FHOGs work, we understand how excited you must be that you are one step away from acquiring your dream home. However, there are still other factors you need to consider so that you’re completely aware of everything before you apply:
Remember that you are only eligible for the grant if you construct a new build or you buy a property that’s newly built. This is why there are first home buyers who resort to only looking at new builds or properties and don’t consider the other half of the market that’s filled with not-so-brand new properties. If you play your cards right and do research, sometimes you can find an already established property with a significantly better value that you don’t end up needing the grant at all.
Generally, land prices can be extremely costly due to there being hardly any vacant blocks available within the vicinity, and many first home buyers are getting competitive over the limited amount of vacant blocks of land, which is why the prices ended up being way higher than it typically is.
In fact, many believe that the extra cash given is simply encouraging owners to increase the selling price, which makes it difficult for young individuals and those who have lower incomes to enter the housing market.
Additionally, the people who are selling the newly-constructed properties already know that they can take advantage of the first home buyer market and place a higher price on the houses that they’re selling.
Most of the time, the empty lots are located in the suburbs that are far away, and it can be difficult to find vacant land in the areas you actually want to buy in.
The cost of building is not cheap and even if you end up receiving the grant and deducting it from the overall cost, it can still be more expensive than buying an already developed property. Moreover, building the house requires a lot of time, so you may find yourself having to rent while your place is still in the works.
While the first home owners’ grant is a fantastic option for those who need financial help, it’s important for you to consider all the factors (including the negative ones) that come with the grant. Create a list of pros and cons and assess every little detail before you send in your application to ensure that you’re making the best decision possible.
Frequently Asked Questions
Reading and understanding the entirety of the first home owners’ grant (often referred to as FHOG) may take a while, so it’s natural for first home buyers to have some unanswered questions. Especially if you’re looking to buy or build a new home as your principal place of residence within 12 months of the home loan approval. Here are the most common queries with regard to the first home owners’ grant in SA:
Can You Use the First Home Owners’ Grant to Buy Land?
You cannot use the grant to purchase land alone. The grant is payable only when you buy or build a new residential property in Australia, specifically in SA. So, if you’re looking to build a home, the grant could be instrumental.
Can You Get the First Home Owners’ Grant if You’re a Permanent Resident?
Yes, eligible first home buyers, including permanent residents, can apply for the grant. Individuals who hold permanent residency status in New Zealand can avail of the home buyers grant, too.
Can You Get the First Home Owners’ Grant SA Twice?
No, you cannot. One grant is payable per applicant. Whether you’re buying a home for the first time or considering building a new home, you’re only entitled to receive the grant once.
Can You Apply for a First Home Owners’ Grant if You Own Vacant Land?
You can apply, but only if the land hasn’t been built on. If you submitted an application as a result of a contract for building or starting construction as an owner-builder prior to 1 July 2000, then you’d be ineligible.
If I Sell My Home, Do I Have to Refund the Grant?
If you sell your eligible home, there’s no need to repay the grant provided you have occupied the home as your principal place of residence for a continuous period of at least six months within the first year since the day of the settlement or the completion of construction.
Is the First Home Bonus Grant Still Available in South Australia?
The First Home Bonus Grant is no longer available in SA.
Are You Able to Get the First Home Owners’ Grant if You’re Married?
If you’re married, you are eligible for the first home owners’ grant as long as you and your spouse meet certain requirements. You have to be absolutely sure of your relationship status before you apply for the grant.
According to the South Australian Office State of Revenue, you and your significant other are considered “partners” if you have been together for at least two years. Meeting this condition means that you and your spouse are eligible for the first home owners’ grant.
What if My Partner Has Already Received the Grant, But I Haven’t?
If your partner has already received the grant before, then you are not eligible for it. When putting through an application for an FHOG, only one person is granted the application. You must also ensure that your partner hasn’t previously used or received a grant, otherwise, you can get denied.
Are We Still Eligible for a Grant if I/My Partner Has Previously Owned a Home?
If you or your partner has held a significant interest in a house before 1 July 2000, then you are deemed ineligible. But, if you or your partner showed relevant interest in a home after the said previous date yet did not live in the house for six consecutive months or longer, then there’s still a chance of eligibility for the grant as long as you meet the other requirements
My Partner and I Broke Up. Can I Still Get Another Grant?
The short answer is no. You are not eligible to get another first home buyers’ grant.
Do I need to live in my new home immediately after buying to qualify for the grant?
After the purchase of your home, you must occupy your first home as your principal place of residence for the specified period. This ensures that the grant genuinely aids home ownership and doesn’t benefit those buying property purely as an investment.
What is the First Home Owner Rate of Duty?
The First Home Owner Rate of Duty is a concessional rate, especially beneficial if you’re a first home buyer purchasing a new property. It’s designed to support those venturing into home ownership for the first time, reducing the overall financial burden.
What if I need the grant for the settlement of my home purchase?
If you require the grant for settlement or first payment, ensure you complete the first home owner application process swiftly. Always be in touch with your lender to make sure the funds, whether it’s from the grant or the first home super saver scheme, are available when required.
What is the difference between the First Home Owners’ Grant and the First Home Super Saver Scheme?
The First Home Owners’ Grant is specifically tailored to help individuals eligible for the first home. This grant focuses on new homes or substantially renovated ones. In contrast, the First Home Super Saver Scheme is designed to boost savings for your first home within the superannuation fund. Both can assist first home buyers, but it’s essential to know about the first home provisions available to ensure you get a grant fitting your needs.
Alternative SA Schemes or Grants First Home Buyers Can Use
Find yourself ineligible for the First Home Owners’ Grant or just looking for other ways how to make purchasing your first property less costly? Here are a few other grants or schemes first home buyers can take advantage of.
The Family Home Guarantee
Back in the 2021 or 2022 Federal Budget, the Family Home Guarantee was announced, allowing single parents to be granted a home loan with a deposit of as little as 2% without the need to pay the lender’s mortgage insurance (LMI).
The Family Home Guarantee was officially launched on 1 July 2021, and the scheme will be offered to 10,000 single parents over the course of four financial years. The guarantee can be used to construct a new home or buy an existing home.
The program is backed by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the government. NHFIC ensures a guarantee to participating lenders up to 18% of the property’s value as long as the borrower has a minimum of 2% per deposit and is deemed eligible for the grant.
In order to be eligible for this program, the borrower must be a single parent with at least one dependant and must have a taxable income that does not go past $125,000 per year for the previous financial year. Keep in mind that child support payments are not considered a source of income for this criteria.
The Family Home Guarantee is a great opportunity for single parents with dependants to tread into the residential market in no time.
The First Home Super Saver Scheme
The First Home Super Saver Scheme (FHSSS) was created to assist eager first-home buyers in saving enough money for a deposit to be able to purchase their first residential property. The scheme allows individuals to make voluntary contributions of up to $15,000 in a span of 12 months and withdraw up to $50,000 (including their earnings and less tax) when it’s finally time to buy their first home.
When one is saving through their super, they pay fewer taxes, resulting in a quicker way of building up a bigger deposit amount. The scheme also works for couples, doubling the potential amount to $60,000.
Keep in mind that the First Home Super Saver Scheme only permits you to purchase a property within “residential premises”, meaning houseboats and motorboats are not allowed.
First Home Guarantee Scheme
At the start of 2020, the First Home Guarantee Scheme was introduced by the Australian government. It was formerly known as the “First Home Loan Deposit Scheme”, and it served as a way to help eligible individuals purchase their first home and set foot in the housing market much sooner.
The scheme has been expanded in order to allow even more groups of people to get quicker and more convenient access to purchasing their homes through the guarantee scheme during the 2021-22 financial year.
From July 1, 2022, up to 30 June 2025, there will be 50,000 vacant spots annually for home buyers that are deemed eligible to take advantage of the First Home Guarantee and its expansions.
The First Home Guarantee is incentivised by the government so that first home buyers can purchase their residential property with a deposit for as low as 5% of the total value, without having to be required to pay lenders’ mortgage insurance (LMI).
This guarantee scheme is eligible for single individuals with a taxable income of no more than $125,000 annually for the previous financial year. In comparison, couples applying must have a combined amount of less than $200,000 for the previous financial year as well. However, couples can only apply if they are married or in a de-facto relationship. Other joint applicants, such as siblings or friends, are not allowed.
Zanda Wealth’s Final Thoughts
The First Home Owners’ Grant SA is a government-backed financial scheme aimed at first home buyers to finally get a chance to purchase their first ever residential property amidst the continuous rise of prices.
The grant lists specific eligibility requirements to ensure that those applying for the grant are actually in need of it. Those whose applications have been approved are entitled to receiving at most $15,000, which they can either use as a deposit for an upcoming construction or extra cash to buy a newly-built home.
Singles and couples are free to apply for the grant, provided that they meet the stated criteria requirements. For couples, there may be different factors to be considered in order to get approval for the grant, which were previously explained in this article.
There are multiple ways in order to apply for the first home owners’ grant. However, the most popular choice of applying is through a lender or mortgage broker. The application process typically takes about ten business days to process from the day of the submission.
If you get approved for the grant, the money will not be released immediately, which may be a common misconception for those who are thinking about applying. In reality, the grant will be paid based on a few different factors. Ensure that you do not solely depend on the grant to fund your future housing from the get-go so that you don’t run into any inconvenience.
While the first home owners’ grant is a gateway for first home buyers into the housing market, there has been some criticism about this. Some noticed that sellers have been bumping up the prices of their residential properties because of this incentive.
Additionally, there has also been a noticeable clash between the first home buyers and the overly controlled housing market as the price increase decreases the benefit of the first home owners’ grant.
Nowadays, “affordable” and “housing” are two terms that don’t seem to go together, which is why these grants have been established to make it easier for those to have a decent home to reside in.
Zanda Wealth’s team of professional mortgage brokers can help you set foot on your property journey. In addition, we offer complimentary strategy sessions to help you make the right decision in choosing the best loan for you.
Our list of services includes first home buyer loans, refinance loans, investment loans, construction loans, and more.
Should you have any other inquiries, we’re just one contact away. If you’re looking for a sign to invest in a property, then this is it.
