VIC First Home Owner Grants explained

author-avatar By on July 09, 2021
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VIC First Home Owner Grants explained

With property prices surging, it’s getting harder than ever for first home buyers to realise the Great Australian Dream of home ownership - that’s where first home owner grants may help.

Thanks to certain government grants and schemes, first time buyers trying to get into the property market can receive a cash boost to help them on their way.

In this article we’ll go through how Victoria’s First Home Owner Grant (FHOG) works, as well as:

  • How much you can get from it
  • How to apply for the grant
  • Whether you can get stamp duty discounts, and how much you could save on stamp duty
  • Other schemes first home buyers can use, such as the New Home Guarantee and the First Home Super Saver Scheme

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner-occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 27, 2021. View disclaimer.

VIC first home buyers: by the numbers

Victoria is home to the Great Ocean Road, some of the best wine regions, and the highest number of first home buyers in the country.

According to Australian Bureau of Statistics (ABS) lending data, 2020 saw more than 137,500 owner-occupier home loans granted to first home buyers - an average of more than 11,400 per month.

But Victoria had the lion's share of first home buyer loans, with 41,588 in 2020 - roughly 30% of loans granted to FHBs in Australia.

The VIC First Home Owner Grant

First home buyers in Victoria can get the First Home Owners Grant (FHOG) if they are buying or building a new home.

How much can you get from the VIC grant?

Currently, first home buyers in Victoria can receive a grant of $10,000, if they’re eligible.

For contracts signed from 1 July 2017 to 30 June 2021, buyers in regional Victoria could qualify for $20,000.

What are the price limits for the grant?

The grant is only available to those buying or building a new home valued up to $750,000.

A new home can be a home that is substantially renovated, or a home built to replace demolished premises. It cannot be an investment property or a holiday house.

How do you qualify for the grant?

There are a number of eligibility conditions buyers have to meet (outside the $750,000 price limit) to be eligible for the FHOG:

  • Each applicant must be at least 18 at settlement or completion of construction;

  • At least one applicant must be an Australian citizen or permanent resident;

  • At least one applicant must occupy the home as your primary place of residence for at least 12 months, commencing within 12 months of settlement or completion of construction;

  • If the home is not in regional Victoria, it must be less than five years old to be eligible;

  • Neither applicant can have owned a home or other residential property in Australia, either jointly or separately, before 1 July 2000;

  • Neither applicant can have already received the FHOG in Australia;

  • Neither applicant can have lived in a home in Australia which they have owned or part owned on or after 1 July 2000, for a continuous period of at least six months.

How do you apply for the VIC First Home Owner Grant?

To apply for this grant you will need to fill out the First Home Owner Grant application form via the State Revenue Office of Victoria.

You will also be required to provide all the usual documentation such as:

  • 100 points of ID (driver’s license, birth certificate, passport, etc)

  • Other ID categories, such as your Medicare card and proof of your current address, like a utility bill

  • More additional supporting evidence if it’s required

You can send these forms to either the revenue office or submit them via an approved agent. Applications must be lodged within 12 months of settlement or completion of construction of your home.

Can you use the grant for a deposit?

Yes, the money can be used towards your deposit but given it’s only $10,000, it likely won’t be enough to cover the full deposit and you’ll have to come up with the rest out of your savings.

Don’t forget that in order to avoid paying Lenders Mortgage Insurance (LMI) you’ll have to come up with a 20% deposit, and lenders still want to see that you’ve genuinely saved most of the deposit.

For more information on the grant, visit the State Revenue Office of Victoria for more information.

Can first home buyers get stamp duty discounts in VIC?

Stamp duty is an often forgotten about and expensive cost for many first time buyers in Australia. However there are stamp duty concessions for first home buyers in Victoria.

VIC stamp duty concessions for first home buyers

If you bought your first home on or after 1 July 2017, you may be eligible for an exemption or concession from stamp duty.

This duty assistance is available to eligible first home buyers, in addition to the grant.

The first home buyer duty exemption or concession may be available if:

  • You enter into a contract of sale to buy your first home on or after 1 July 2017

  • Your home has a dutiable value of:

    • $600,000 or less to receive the first home buyer duty exemption

    • $600,001 to $750,000 to receive the first home buyer duty concession

Examples of first home buyer duty concession

Dutiable value ($)

Normal duty ($)

Duty after concession ($)

605,000

31,370

1,045

625,000

32,570

5,428

650,000

34,070

11,356

675,000

35,570

17,785

700,000

37,070

24,713

725,000

38,570

32,141

745,000

39,770

38,444

Source: State Revenue Office of Victoria

These stamp duty exemptions and concessions are available to all first home buyers in Victoria, regardless of whether they have purchased a new or existing home.

How much is stamp duty in VIC?

According to CoreLogic data from May 2021, the median house price in Victoria is $740,562. Using the State Revenue VIC calculator, stamp duty on a property of this price would be $29,628 with no concessions. But for buying a home worth the average FHB loan size of $451,516, a first-time buyer in Victoria would pay $0 for stamp duty thanks to these FHB concessions.

What other VIC schemes and grants can first home buyers use?

First home buyers in Victoria can combine several other schemes with the FHOG and stamp duty concessions if they wish, potentially providing tens of thousands in savings.

The New Home Guarantee

Previously known as the First Home Loan Deposit Scheme (FHLDS), the New Home Guarantee provides up to 10,000 first home buyers each year with Federal Government support to buy a home. Under the scheme, eligible first home buyers can qualify for a home loan with as little as a 5% deposit (without having to pay LMI) thanks to a government guarantee of up to 15%.

The scheme is available from 27 lenders and is subject to price caps and availability. The scheme is also now limited to new builds only.

The Family Home Guarantee

The 'Family Home Guarantee' allows 10,000 single parents (over four years, or 2,500 per year) to qualify for a home loan with as little as a 2% deposit without having to pay LMI. The government will guarantee up to 18%.

The scheme, which was introduced in the 2021/22 Federal Budget, is available to previous owner-occupiers as well as first home buyers; has a maximum annual income cap of $125,000; must be for principal & interest (P&I) repayments, and for loans no longer than 30 years.  

The First Home Super Saver Scheme

The First Home Super Saver Scheme (FHSSS) allows first home buyers to utilise their super fund to help them save up a deposit. Under the scheme, a first home saver can salary sacrifice up to $15,000 of their wages per year towards the FHSSS (taking advantage of a discounted tax rate of 15%) where the funds will earn a deemed rate of return (currently 3.04% p.a.). A maximum of $30,000 can be put towards the scheme (although this is set to increase to $50,000 in July 2022). When ready to buy a house, this money can be withdrawn (along with the earnings) for use as a deposit.

Read more about First Home Owner/Buyer Grants:


Photo by Tom Rumble on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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