Making The Most Of Being A First Home Owner

By Matthew Kenworthy | First Home Buyers

As a first home owner it’s important to take advantage of all the grants available to you. Ultimately you’re only a first home owner once. If you fail to take advantage of what’s available to you the first time, you won’t be able to on your next property.

The grants mentioned in this article are specific to Western Australia. Whilst there’s some crossover with other states it’s best to check with your bank or mortgage broker for the specifics.

First Home Owners Grant

The First Home Owners Grant (sometimes called the First Home Buyers Grant) is the most commonly known grant available. Currently eligible applicants will receive $15,000 at slab down for new home (boosted from $10k until 31 December, 2017). There is no longer a grant available in Western Australia for established properties.

This is generally paid direct to your lender and given to your settlement agent to pay as directed at settlement. By having it paid direct to your lender you’ll generally be required to pay less at settlement.

Our First Home Owners Grant has more information on the grant and eligibility criteria.

It’s possible to have the First Home Owners Grant paid directly to your bank account, however it’s far quicker and simpler to have it processed by your lender.

Stamp Duty Concessions

In Western Australia buyers who are eligible for the First Home Owners Grant also pay no stamp duty (provided the property value is under $430,000, beyond this you may pay a discounted rate).

At the highest threshold purchasing a $430k property the stamp duty applicable is $14,440. In total, this could be a $17,440 saving.

Home Buyers Assistance Account

When real estate agents receive a deposit the money is held in trust. They’re not legally allowed to spend the money or interest they receive on the funds. The interest received is used to fund the Home Buyers Assistance Account (HBAA) scheme.

The scheme allows for a rebate of up to $2,000 on incidental expenses or fees when purchasing a home. These fees can include settlement agent fees, government charges and bank fees. Importantly lenders mortgage insurance is included so most first home owners receive the full $2,000 rebate.

The HBAA scheme has a few extra criteria beyond the First Home Owners Grant including:

  • The property being purchased must be under $400,000.
  • Is only available when purchased through a licensed real estate agent.
  • Only available on established property. Not available for construction or house & land packages.

The HBAA monies can only be applied for after settlement. You’ll need the final settlement statement from your settlement agent in order to apply. Once approved, the lender will receive a cheque made out to you and will credit the funds direct to your loan account.

Unlike the First Home Owners Grant however if one applicant is a first home buyer and the other is not you may be able to apply for a partial grant.

The Department of Commerce website has more information on the Home Buyers Assistance Account.

Make sure you apply within 90 days of your offer being accepted. Going past the deadline may result in you being ineligible to apply.

Builders Grants

In Western Australia the grants are currently given equally to those purchasing existing and building new property. The Eastern States currently have grants restricted to those who build in place of the First Home Owners Grant.

Between October 2008 and December 2009 there were extra government grants available to those who built known as the First Home Owners Boost Scheme. This effectively was a $21,000 First Home Owners Grant for those who chose to build. This ended 31 December, 2009.

Some building companies however like to promote the ‘Return of the $21,000 Grant’. In reality, purchasers are just receiving the standard $10,000 grant and the builder has dropped their prices by $11,000.

How A Mortgage Broker Can Help

A mortgage broker who understands your situation can advised which grants you may be eligible for. In the case of the First Home Owners Grant most brokers should assist you in applying to your financial institution for the processing of the grant.

For other grants a mortgage broker can advise you on how to apply. If you’re interested in finding out what grants you’re eligible for please get in contact with us about our obligation free mortgage broker service.

About the Author

Matthew Kenworthy is a specialist in all aspects of Residential & Commercial Finance. He can assist all borrowers from First Home Buyers to Property Investors with Large Portfolios.