A lot of things happen over summer holidays. Some of us evaluate our careers and goals, some get engaged and others decide it is time to buy or build a house.
If you are in that last category, you might be tempted by the State Government’s First Home Owners Grant, or FHOG as it is known.
There is no doubt the grant is a welcome bonus to take advantage of, but decades of conveyancing experience overseeing property transfers does put it in a different light for my team.

What is the First Home Owners Grant?

Firstly, the scheme is a national one brought in back in 2000 to help offset the introduction of the GST and its potential impact on home ownership by giving people who qualify for it a lump sum payment, typically $7,000.
However, even though it is a national scheme, it is actually funded and administered by each State and Territory government, which means the First Home Owners Grant is different in various parts of Australia.
To me, this makes it a prudent move to engage a conveyancer very early in your house hunting or house planning stages so that you get advice that gives you a realistic overview of your situation.

How do I qualify for the FHOG?

RevenueSA makes information available about the Grant and even provides and online checklist to see if you qualify.
Some of the most obvious qualifying points are:

  • Will this be the first time each applicant or their spouse/domestic partner will receive a grant under the First Home and Housing Construction Grants Act 2000 in any state or territory of Australia?
  • Is each applicant and their spouse/domestic partner a person who has never owned a residential property jointly, separately or with some other person before 1 July 2000, in any state or territory of Australia?
  • Will each applicant be occupying the established home as their principal place of residence for a continuous period of six months commencing within 12 months after completion of the eligible transaction?
  • Is the sale price or market value of the property (whichever is higher) below $575,000?

If you answer ‘no’ to any of those questions, you automatically become ineligible for the Grant.
You can work through the eligibility checklist yourself online.

Does the FHOG cover all my fees and duties?

Your Grant won’t cover all your fees and duties but it will help.
No matter whether you qualify as a first home owner or not, there are still taxes and levies to consider, such as:

  • Stamp Duty
  • Land Tax
  • Emergency Services Levy

The State Government charges stamp duty at the time of transfer and it is based on the sale price or the market value, whichever is the highest.
Land tax is an annual tax but does have some exemptions. Again, your conveyancer will clarify this with you.
And the emergency services levy is another annual charge. You might have to pay a proportion of the levy at the time of settlement. This is something that conveyancers will handle for you.
To me, the most important thing is that you investigate the First Home Owners Grant with eyes wide open. Also remember that at this stage the FHOG is set to run out in SA for established homes on 30 June 2014, so you should consider taking up this opportunity very soon.
Read the RevenueSA pages linked to above, and arrange a chat with your conveyancer as early as possible so that your holiday buying can be a time to enjoy not endure.