First Home Owner Grant

As at 1 January 2010
The Western Australian Government’s aim is to help people purchase their first home through a First Home Owner Grant (FHOG) Scheme.
The grant was introduced to offset the higher housing costs associated with the introduction of the Goods and Services Tax (GST) on 1 July 2000. All States and Territories provide the grant under broadly uniform arrangements agreed with the Federal Government.
This fact sheet explains how the First Home Owner Grant Scheme operates and is a guide to assist with frequently asked questions in regards to whether you may be eligible. It should not be relied upon to determine your eligibility. Should you have any doubts on your eligibility, contact the WA Office of State Revenue.
INTRODUCTION
ELIGIBILITYFORTHEGRANT
How do I know if I am eligible for the grant?
To be eligible for the grant:
1.
You must be an eligible person; and
2.
You must have entered into an eligible transaction; and
3.
The total value of the property (i.e. total value of the home and land) must not exceed a cap amount.
1.
Who is an eligible person?
•
Applicants must be natural persons (e.g. not a company) and 18 years of age or over at the commencement date of the eligible transaction#.
•
At least one of the applicants must be an Australian Citizen or Permanent Resident at the commencement date of the eligible transaction.
•
Applicants and/or their spouse* cannot have previously received a grant under this scheme.
•
Applicants and/or their spouse* must not have previously owned residential property, anywhere in Australia, prior to 1 July 2000.
•
Applicants and/or their spouse* must not have previously purchased and occupied residential property, anywhere in Australia, as a place of residence on or after 1 July 2000.
•
Applicants must occupy the home purchased or built, as their principal place of residence for a continuous period of six months commencing within twelve months of settlement in the case of established properties, or within twelve months of completion in the case of a home being built.
•
Everyone with a relevant interest in the home must be an applicant. For example, every person who will be registered on the Certificate of Title must be an applicant.
# The Commissioner may consider an exemption from this requirement in certain cases.
* Spouse – someone you are legally married to or a de facto partner of two years standing at the time commencement of the eligible transaction.
2.
What is an eligible transaction?
•
A contract made on or after 1 July 2000 for the purchase of a home; or
•
A comprehensive home building contract made on or after 1 July 2000; or
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•
In the case of an owner builder, building work on the home commenced on or after 1 July 2000.
3.
What is the cap amount?
•
For an eligible transaction made on or after 1 January 2010, the total value of the property (i.e. total value of the home and land) must not exceed $750,000 if the home is located south of the 26th parallel or $1,000,000 if the home is located north of the 26th parallel.
FREQUENTLY ASKED QUESTIONS
How much is the grant?
Currently the grant is $7,000 or the amount that you must pay to purchase or build the house, whichever is the lesser amount.
How long will the grant be available for?
The legislation does not include an end date for the scheme.
Does my income affect the grant?
No, the grant is not income tested.
What type of home qualifies for the grant?
It can be a house, unit, duplex, flat, townhouse etc. The home must be affixed to land and lawfully used as a place of residence. The grant will not be available for renovation to an existing building or for the purchase of vacant land.
Are there any conditions attached to how the grant may be used?
No, if you are eligible there are no conditions as to how the grant funds may be used by the applicant, however, private arrangements may be entered into with your financial institution in regards to how it will be used in order to gain finance approval.
Can I rent the home out before I move in?
Yes, provided you occupy the home as your principal place of residence within 12 months of:
•
settlement, in the case of established properties; or
•
completion, in the case of a home being built.
Where is the 26th parallel located?
The 26th parallel is a circle of latitude that is 26° south of the equator. Examples of location are:
•
Town of Kalbarri is south of the 26th parallel; and
•
Town of Denham is north of the 26th parallel.
RESIDENCYREQUIREMENT
GENERALINFORMATION
When do I have to occupy the home and for how long?
You must occupy the home as your principal place of residence for a continuous period of 6 months, commencing within 12 months of:
•
settlement, in the case of established properties; or
•
completion, in the case of a home being built.
If you are unable to occupy the home as your principal place of residence for a continuous period of 6 months, the onus is on the applicant to advise the Commissioner of their circumstances. The Commissioner may consider an exemption from this requirement in certain cases.
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What happens if I cannot meet the residency requirement?
If you are unable to move into the home within the 12 month period, you must give written notice of the fact to the Commissioner. This notice must be given within 30 days of the expiration of the required 12 month residency take-up period, or the date it becomes apparent you will not be able to fulfil the requirement (whichever is the earlier).
The Commissioner will make a determination if you are required to repay the grant, and advise you accordingly.
Failure to advise the Commissioner in writing will result in the applicant being required to repay the grant with penalties, and also being ineligible for a future grant.
Does the value of my property affect the grant?
Yes, from 1 January 2010 the Western Australian government introduced a cap amount (see point 3 ‘What is the cap amount?’ above) on the total value of buying or building a home for which the first home owner grant will be payable. The cap amount only applies to the following eligible transactions:
•
in the case of a contract to purchase or build, the date of the contract is made on or after 1 January 2010; or
•
in the case of the building of a home by an owner builder, the laying of the foundations commenced on or after 1 January 2010.
How is the Total Value determined?
The total value of a transaction can be determined by applying the following:
•
Established, New Home or Off-the-Plan – the greater of the consideration for the contract to purchase, or the unencumbered value.
•
Contract to Build – the total of the consideration for the contract to build, and the unencumbered value of the land.
•
Owner Builder – the unencumbered value at the date the transaction is completed, of the home (i.e. total value of the home and land).
NOTE: The cap does not apply to an eligible transaction entered into between 1 July 2000 and 31 December 2009 (inclusive).
Am I eligible if my spouse/de facto has owned, or still owns a home?
No. The applicant and their spouse/de facto must never have previously owned a home anywhere in Australia before 1 July 2000, even where the spouse/de facto is not an applicant for the grant to the eligible transaction.
PREVIOUSOWNERSHIP
SPOUSEELIGIBILITY
CAPONTHEGRANT
What if I own or have previously owned vacant land?
Owning vacant land will not affect your eligibility for the grant regardless of when it was purchased.
If I purchase a home on or after 1 July 2000 and never live in it, will I be eligible for the grant for my next home?
Yes, provided that you occupy the next home as your principal place of residence. Bear in mind that this depends on your individual circumstances and you should contact the Office of State Revenue for further information.
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Where can I obtain the WA First Home Owner Grant application form?
•
From the First Home Owner Grant website at http://www.osr.wa.gov.au/ or http://www.firsthome.gov.au/
When do I lodge my application form?
An application may be lodged at any time after:
•
A contract to buy or build is made; or
•
The foundations are laid on an owner builder home;
provided the application is lodged within 12 months of completion of the eligible transaction.
Where can I lodge the application form?
Applications may be lodged through an approved First Home Owner Grant participant*, or with the WA Office of State Revenue.
If you are unsure where to lodge your form and are obtaining finance through a financial institution, please consult with them prior to lodgement to ensure that your form is sent to the correct place.
* An approved First Home Owner grant participant is a body (usually a financial institution) that has an arrangement with the Commissioner of State Revenue to receive and process applications.
What evidence do I need to provide with my application?
You need to provide documentary evidence that proves you are an eligible person and have entered into an eligible transaction.
This will include evidence of your Australian citizenship or permanent residency status, a copy of your contract for purchase or building contract, and in some cases a copy of a valuation of the home for a related party transaction.
More specific details are provided on the “First Home Owner Grant Application Form and Lodgement Guide”.
What is a related party transaction?
A related party transaction is an eligible transaction where the applicant(s) or their spouse/de facto partner is related to or associated with the vendor or builder.
A person is related to or associated with another party where:
•
One is the spouse/de facto of the other; or
•
They are related by blood, marriage or adoption; or
•
They are a Shareholder or Director of the other party, being a company; or
•
They are a Beneficiary of a trust for which the party is a trustee; or
•
The transaction is otherwise not at arm’s length.
REJECTEDAPPLICATIONS
APPLICATIONFORTHEGRANT
SUPPORTINGDOCUMENTATION
RELATEDPARTYTRANSACTIONS
What can I do if the Commissioner rejects my application?
If you are not satisfied with the Commissioner’s decision to reject your application, you may lodge a formal objection against the decision, stating fully in writing the grounds on which the objection is based.
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OFFENCES
Making a false or misleading statement in connection with an application for a grant carries a penalty up to $20,000, and you may be required to repay the grant with penalties and other costs.
FORMOREINFORMATION
Website: http://www.osr.wa.gov.au/ or http://www.firsthome.gov.au/
Email: firsthomegrant@dtf.wa.gov.au
Telephone: (08) 9262 1299 or 1300 363 211
Facsimile: (08) 9262 1597
Mail: GPO Box T1600
Perth WA 6845
Location: Office of State Revenue
Plaza Level
200 St George’s Terrace
Perth WA 6000
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Keystart Home Loan

  
 Keystart Home Loan
  The Keystart ‘Low Deposit’ home loan is a variable interest rate loan which can be used by owner-occupiers to buy an established home or build a new house. It is available to both first and subsequent homebuyers and we lend in all areas of Western Australia, including the country regions.
All about the loan
•Maximum loan $384,000  ($475,000 above 26th Parallel)
•Maximum property value $400,000 ($500,000 above 26th Parallel)
•Minimum deposit 4%(For any property price exceeding $400,000 a 5% deposit is required)
•A structual report must be obtained by the client for any property purchased that is over 25 years old.
•Maximum income limit;
•Single Applicants $70,000 per annum
•Couples/Families $90,000 per annum
•2% genuine savings to be evidenced prior to approval
•First Home Owner Grant can be used towards deposit and fees
•Other debt repayments cannot exceed 7% of gross income
•Fee Assistance of up to $2,000 can be added to the loan for non-first homebuyers
•No Mortgage Insurance required
•No monthly fees
  Eligibility Criteria
To qualify for a Keystart loan, applicants must:
•be owner-occupiers
•reside in Western Australia
•be a permanent resident
•be over 18 years of age
•not be currently bankrupt or discharged from bankruptcy within 2 years of the date of the application
•not own or part own other residential property at Settlement.
Terms and Conditions
All Keystart loans are for owner-occupied purposes only, not investment. The maximum size of a Keystart loan available to you is determined by your household size, level of income and other commitments that you may have. Each loan is subject to Keystart’s standard terms and conditions.
If you would like more information, please do not hesitate to contact us on 1300 578 278.


 

Home Buyers Assistance Account

 
The Home Buyers Assistance Account is established under the Real Estate and Business Agents Act 1978 to provide first home buyers with financial support.

The scheme provides a grant of up to $2,000 for the incidental expenses of first home buyers when they purchase an established or partially built home through a licensed real estate agent for a purchase price of $400,000 or less.  
The scheme is funded from interest paid on real estate agents' trust accounts. The grant can be used for — mortgage registration fees, solicitor and/or settlement agent fees, valuation fees, inspection fees, loan establishment fees, mortgage insurance premiums and lending institution fees associated with lodging the application.
For more information, please view the Home buyers assistance account fact sheet.
Application criteria:
The purchase price of the home is $400,000 or less;
you must be buying your first home, which is established or partially built (not vacant land or a 'house and land' package);
you or your spouse or partner must not own or have owned any property in the State of Western Australia before (if one of the people you are buying a home with, owns or has owned a home in Western Australia before, then you can apply for a partial grant based on the percentage of your ownership of the home);
you must live in the home for at least the first 12 months;
you must purchase the home through a licensed real estate agent;
the application must be lodged with the Registrar of the Real Estate and Business Agents Supervisory Board no more than 90 days after the date that the offer and acceptance contract to buy the home is accepted (in exceptional circumstances, a short extension of time for lodgement may be granted by the Registrar if reasonable grounds exist); and
the home loan must be financed through an authorised lending institution (such as a bank, building society or credit union).
How to apply:
You must complete the application form and follow the instructions on the form.
If you have any further queries, call (08) 9282 0836.
The Federal Government's First Home Owners Grant
In addition to the Board's Home Buyers Assistance Account, first home buyers may also be eligible to a financial rebate through the Federal Government's First Home Owners Grant. The grant is administered by the Office of State Revenue. For further information about the grant, contact the WA Department of Treasury and Finance on 1300 363 211 or visit their website.

Opt for Fixed Rated Loan

THE bruising political row over banking competition has made potential home buyers more savvy with many opting out of fixed-rate loans, according to new figures.
It may have also turned up the pressure on lenders to be more creative in attempts to gain market share, even before the federal government implements its range of proposed initiatives.

Those taking the plunge into home ownership appear to be turning their backs on the security of fixed-interest-rate loans, instead choosing from a wider range of variable rate mortgages that are being offered.

A study by mortgage broker Loan Market has found a significant increase in the number of people seeking out home loan and mortgage calculators through the internet.

An examination of web traffic showed that those searching the term "home loan calculator" accounted for 20 per cent of mortgage broker website traffic in February, more than doubling since the start of 2011.

Loan Market chief operating officer Dean Ruston said it was an encouraging sign that potential borrowers were becoming more proactive.

"Customers want to be informed when they sit down with their mortgage broker or lender ... to ensure that they get the best available option," Mr Ruston said releasing the findings on Monday.

Last November's spike in standard variable mortgage rates, led by the four major banks, caused a political furore and prompted parties of all stripes to come up with various banking competition packages.

The 40-basis-point jump in standard variable mortgage rates - larger than the Reserve Bank of Australia's (RBA's) 25-point increase in the cash rate - also saw a growing number of home buyers opting for the security of a fixed-rate loan.

However, home loan provider Mortgage Choice said demand for such loans tumbled in February for the first time in seven months in response to a wider range of variable rate mortgages coming on the market.

The proportion of fixed-rate loans it granted was just 10.7 per cent in February, the lowest amount since October, and compared with 15.3 per cent in January and 15.2 per cent in December.

Mortgage Choice currently writes one in 25 new home loans in Australia.

"It appears new borrowers were lapping up the newly introduced deals on offer in February, taking advantage of lenders' various incentives as they compete to outstrip each other of vital market share," the broker's spokesperson Kristy Sheppard said releasing the results.

"A move away from fixed interest rates may also signal an uptick in positive consumer sentiment towards the economic outlook."

The RBA left the cash rate at 4.75 per cent for a third straight monthly board meeting last week, and economists expect this stability to continue.

Official housing finance data for January is released on Wednesday by the Australian Bureau of Statistics, the same day as the latest consumer confidence report is released by Westpac and the Melbourne Institute.