First home buyers
Are you entitled to the First Home Owner’s Grant?
The Government introduced the First Home Owner’s Scheme in July 2000. The grant is a once only payment from the Tasmanian Government, funded by the Federal Government from revenue received from the Goods and Services Tax. It was introduced to offset the impact of the GST and to assist people to purchase their first home. From the 14th of October 2008 until 30th June 2009, the First Home Owner’s grant is doubled from $7,000 to $14,000 and to $21,000 for buildings to be constructed.
The applicant must be an Australian citizen or permanent resident, and none of the applicant’s or their spouse can have previously owned a home either jointly or severally. The property being purchased must be used as the principal place of residence within the first twelve months and it must remain the principal residence for a minimum of 6 months.
If you purchase vacant land, the grant will only be paid when you build your home. A property that is used for both residential and commercial purposes is eligible for the grant
You may be entitled to the grant if you have previously been married and divorced and in the settlement, the spouse who had no connection with the house (i.e. was not registered on the title or mortgage) received a payout since such a person has not officially been a home owner.
To apply for the grant you will need to fill in the prescribed form from the Tasmanian Government. Your banking institution will happily help you fill in this form with your loan application. Some financial institutions may require that the grant be paid off the mortgage. In this case the mortgage will be subject to the applicant being granted the first home buyers grant.
Once the application has been received and checked, a letter will be sent to the applicant advising that they are eligible for the grant. A rejection letter will also be sent to the unsuccessful applicants advising of the reason that they have been rejected. If the applicant is successful the $14,000 will be transferred to the financial institutions trust account for disbursement to either the mortgage or the applicant’s nominated bank account to be available at settlement of the contract, assuming that they have been given enough time to process the application.
It is not necessary to insert a clause regarding the First Home Owner’s Grant into contracts to qualify for a mortgage loan because some applicants will have sufficient savings not to require the grant and those who don’t, the bank will not approve unless the applicant first gets approval for the grant.
The government do not mind how you use the grant money. As long as you are buying your first home and you qualify, they will pay you the money. If you intend to use the money as part of your deposit, you need to talk to your financial institution first to ensure that they will accept it since they usually still need to have a record of savings. Banks usually require that you have a minimum of 5% savings plus the legal fees and stamp duty fees, however with the introduction of the stamp duty relief this may have eased.
If you require more information regarding the first home owner’s grant, enquiries can be made to the Revenue and Gaming Division of the Department of Treasury and Finance. For more information of the First Home Owners Grant go to www.firsthome.gov.au or www.sro.tas.gov.au (State Revenue Office).
Are you entitled to stamp duty relief?
As part of the 2004 State government budget package they have introduced stamp duty relief of up to $4000 for first home buyers where the property they are purchasing is $350,000 or less. There are eligibility requirements. This concession is available to first home buyers who purchase from the 20th May 2004 to the 30th June 2005. The duty concession will be reviewed before the end of the 2004/2005 year so check the government sites for updates.
To apply for the stamp duty relief you must first be approved for the First Home Owner’s Grant. Once your financial institution has applied for the FHOG you will receive a Unique Identification Number (UIN). This number is required when submitting your Transfer and Contract lodgement with the State Revenue Office.
The Duty Concession means that first home buyers that purchase residences under $152,100 will not have to pay any duty on the property.
For more information on this subject go to www.treasury.tas.gov.au or www.sro.tas.gov.au and follow the prompts.
Have you considered the Government Finance Scheme?
The Home Ownership Assistance Program (or HOAP) is a Tasmanian Government scheme designed to help low income Tasmanians buy their own home. HOAP offers loans to eligible households that can afford to buy a home but cannot obtain a loan from a bank, building society of credit union. HOAP loans provide greater borrowing power and require a lower deposit than standard loans. The HOAP scheme is administered by Tassie Home Loans Pty Ltd. For more information of the HOAP scheme go to www.tassiehomeloans.com.au and follow the prompts.