First Home Owner Grant (FHOG)
A state or territory based cash grant paid to eligible first home buyers purchasing or building a new residential property.
In detail
The First Home Owner Grant is administered separately by each state and territory rather than the federal government. Most jurisdictions restrict the grant to new build homes or off the plan purchases, and grant amounts vary widely between states. Some jurisdictions have replaced the grant with stamp duty concessions or other schemes. Brokers should always check the current rules and amounts on the relevant state revenue office website before advising a client.
Eligibility requirements typically include being a first home buyer, occupying the property as a principal place of residence for a minimum period, and meeting price caps. Where a grant is payable, it is usually paid at settlement and reduces the funds required from the borrower at completion.
Why it matters for brokers
FHOG is an important piece of the funding puzzle for first home buyer clients purchasing new builds in states that still offer it. Missing the grant or assuming the wrong amount can mean quoting incorrect funds to complete figures, creating issues at settlement.
Example in practice
A Queensland first home buyer purchases a new townhouse for $580,000. The broker checks the current Queensland First Home Owner Grant amount and price caps on the Queensland Revenue Office website, then applies for the grant on the client behalf to reduce the cash required at settlement.
Related terms
Stamp Duty
A state based tax payable on the transfer of property, calculated as a percentage of the purchase price.
Lenders Mortgage Insurance (LMI)
An insurance premium charged to borrowers that protects the lender, not the borrower, if a high LVR loan goes into default.
Loan to Value Ratio (LVR)
The loan amount expressed as a percentage of the property value, used by lenders to assess risk on a home loan.
Guarantor Loan
A home loan where a family member provides their own property as additional security to support the borrower.
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