Building your first home is a significant milestone – for most of us, it’s also a financial challenge.
Fortunately, Victoria offers a range of grants and incentives designed to assist first-time home builders in making their dream of homeownership a reality.
This article will guide you through the key grants and incentives available, helping you navigate the process with confidence.
First Home Owner Grant (FHOG) - Australia-Wide
The First Home Owner Grant (FHOG) is a national initiative, available in all states and territories of Australia. This grant provides a one-off payment to eligible first home buyers who purchase or build a new home.
As of 1 July 2013, the FHOG offers $10,000 for new homes valued up to $750,000. To qualify, you must be a first-time homebuyer, an Australian citizen or permanent resident, and you must intend to live in the property as your primary residence for at least 12 months.
The home you build or buy must be new or substantially renovated, with the contract signed on or after 1 July 2013. For more details, visit the State Revenue Office of Victoria's FHOG page.
Victorian Homebuyer Fund
The Victorian Homebuyer Fund is an innovative shared equity scheme designed to help first-time home buyers and builders enter the property market. Through this scheme, the state government co-contributes to the purchase of your home, which reduces the deposit required and makes homeownership more accessible.
The government can contribute up to 25% of the purchase price, but this translates to an equivalent share in the property. Over time, buyers buy back their share of the property from the government, with savings or upon selling the property. While there is no interest applied, the value of the government’s equivalent share in the property can appreciate or depreciate over time.
To be eligible, you must be an Australian citizen or permanent resident, and your income must not exceed $125,000 for individuals or $200,000 for joint applicants.
You can gradually buy out the government’s share as your financial situation improves. This fund is especially beneficial for those struggling to save a large deposit. More information is available on the Victorian Homebuyer Fund page.
HomeBuilder Grant
The HomeBuilder Grant was introduced as part of the Australian Government's economic response to COVID-19, providing eligible owner-occupiers with a grant to build a new home or substantially renovate an existing home.
The grant offered up to $25,000 for contracts signed between 4 June 2020 and 31 December 2020, with an additional $15,000 for contracts signed between 1 January 2021 and 31 March 2021. To be eligible, income thresholds apply, with a cap of $125,000 for singles and $200,000 for couples. The value of the new home must not exceed $750,000.
Applications for this grant have been extended to 30 June 2025. Those who signed contracts within the eligible period should ensure they have submitted all required documentation. Details are available on the SRO Victoria HomeBuilder page.
Stamp Duty Concessions
Victoria also offers stamp duty concessions for first-time homebuyers. If you're purchasing or building a home under $600,000, you may be eligible for a full exemption from stamp duty.
For properties valued between $600,001 and $750,000, a concession applies on a sliding scale. To qualify for the full exemption, the property must be your principal place of residence within 12 months of settlement or completion. More information can be found on the Victorian Government website.
Regional First Home Buyer Schemes
For those looking to build in regional Victoria, additional incentives may be available. These can include additional grants and concessions aimed at encouraging growth in regional areas.
The Regional First Home Owner Grant offers an increased grant amount of $20,000 for new homes built in regional Victoria. Enhanced stamp duty discounts may also be available for properties in designated regional areas, making regional Victoria an attractive option for first-time builders.
Understanding the Application Process
Navigating the application process for these grants and incentives can be complex. It is essential to consult with financial advisors or mortgage brokers who are familiar with the Victorian property market.
Ensuring that you have all necessary documents, including proof of income, citizenship, and contracts for your build, is crucial. Additionally, be mindful of application deadlines, especially for time-sensitive grants like the HomeBuilder Grant.
Maximising Your Opportunities
With the variety of grants and incentives available, first-time home builders in Victoria have significant opportunities to reduce the financial burden of constructing their first home.
These supports can help make the dream of homeownership more achievable. Be sure to explore all your options and consult with experts to maximise the benefits available to you.
Publisher Website: www.homeshelf.com.au