Purchasing a piece of real estate is a big decision that comes with financial responsibilities and many benefits. The benefits to owning your own home include greater privacy and property equity. In addition, homeownership has proven to be beneficial to children’s development. Studies have found that children of homeowners perform better in school and have fewer behavioural problems.
2. Purchasing a piece of real estate is a big decision that comes with financial responsibilities
and many benefits. The benefits to owning your own home include greater privacy and
property equity. In addition, homeownership has proven to be beneficial to children’s
development. Studies have found that children of homeowners perform better in school
and have fewer behavioural problems.
The acquisition of property also gives buyers duty exemptions. For homeowners in
Victoria, a first-time homeowner can be eligible to up to 50 per cent of duty reduction if
their settlement date was on or after 1 September 2014, the contract price was at
$750,000 or less and the dutiable value was $600,000 or less. Apart from the tax
reduction, the government of Victoria also gives first-time homeowners a First Home
Owner Grant (FHOG).
What is a First Home Owner Grant (FHOG)?
A homeowner who purchased their first property or built their first home on or after 1 July
2013 can apply for an FHOG. The grant for these homeowners is $10,000. For those who
built homes worth up to $750,000 in Victoria from 1 July 2017 to 30 June 2020, the grant
is $20,000.
3. Who is Eligible for an FHOG?
Homeowners who signed their contract on or after 1 July 2013 are eligible for an FHOG.
The property can be a house, townhouse or apartment. It must be worth $750,000 or
less.
FHOG applicants must be 18 years and older at the settlement date and must be an
Australian citizen or a permanent resident. New Zealanders with a special category visa
under s32 or a permanent visa under s30(1), who are considered permanent residents of
Australia, can also apply for FHOG. That is if they are in Australia during the settlement.
The applicant must claim the property as their Principal Place of Residence (PPR) and must
reside in the property for at least 12 months upon settlement.
FHOG is not available to those who already received a previous grant. Similarly,
established homes, or those that have previously been sold or occupied are not eligible for
FHOG.
Purchasing a home for the first time is not as simple as exchanging money for a product.
The process of home acquisition can be financially complex. But, with the right
information, homeowners can maximise their tax breaks and benefit from government
grants.
