Rising house prices and a shortage of housing nationally means that buying
a first property in Australian Capital Territory (ACT) can be almost
impossible for first-time buyers. In efforts to redress this situation, the
government has come up with a number of different initiatives designed to
ease the financial burden on first-time buyers, making it easier for them
to begin their property ladder climb. If you're a first-time buyer
considering a property purchase in ACT, this guide is for you! Read on to
find out more about the first home owners' grant, as well as other
concessions for first-time buyers.
The first home owners' grant ACT residents can take advantage of is a one-off payment of $7,000 (as at the time of writing). It can be used against the purchase price of a new-build property or one that's been significantly renovated or remodelled. New-build properties include ones constructed by a developer, properties that haven't yet been built (off-plan purchases) or properties which owners are building themselves (or commissioning a builder to build for them). Note that an existing property needs to be extensively renovated before it will be eligible - small-scale renovations aren't normally eligible for first time home buyer grants. Properties must not cost more than $750,000 to purchase in order to be eligible for the grant. To get the ball rolling, applicants need to check that they are eligible in principle to apply (check https://www.revenue.act.gov.au/home-buyer-assistance/home-buyer-concession-scheme for the full list of criteria), then fill in a first home buyers' grant application form. Once submitted, the government will then make a decision on whether your application is successful or not.
Usually, the first home grant isn't available if you intend to buy a
property which has been previously owned or lived in. The exception is if
the property has been significantly altered or remodelled. If you are a
first time home buyer that's counting on the grant to help them finance a
purchase, it's worth checking in advance if the property you're considering
will be eligible. Remember that generally, existing properties aren't
eligible, even if a run-of-the-mill piece of remodelling has been
The Australian Capital Territory first home buyers' grant is $7,000. Other states have higher grant levels ($10,000 in Queensland and NSW, for example). This broadly reflects the fact that properties in ACT are less expensive than in some other states (although obviously there are exceptions).
The ACT government states that if your First Home Owners' Grant is approved:
The first home buyers' grant Australia wide provides a welcome addition to home buyers' finances. At the time of writing it is still available in ACT, as well as in the other states. Unfortunately, the future of the grant can't be guaranteed: annual budgetary pressures mean that the amount may vary in the future, or the grant may be discontinued on a temporary or permanent basis. For example, the grant in Queensland was recently slashed from $15,000 to $10,000. Once you have identified the property you intend to purchase, you should apply for the new home owners' grant. Unlike the purchase of an existing property, new-build properties don't have the problems of property chains or owners changing their mind about selling at the last minute!
Payment of the First Home Owner Grant will end for transactions entered into after 30 June 2019.
The eligibility criteria for the first home owners grant in ACT can vary depending on specific circumstances and the details can be found here. Some important general criteria that needs to be satisfied includes:
· Applicant(s) must not have owned a home previously in Australia.
· Applicant(s) must be over 18.
· Applicant(s) must be Australian nationals or have an appropriate visa - residents with temporary visas are not eligible, for example.
· The property must cost less than $750,000 and be new-build or heavily renovated.
· You must move into the property within 12 months of purchase and live there for at least a year afterwards.
In the first instance, you will need to fill in the first home owner's grant application form and submit it.
Yes, it can count towards a deposit. Check with your home loan provider, as
some won't accept the grant as part (or all) of a deposit, due to the
timing of its payment. It's also unlikely that $7,000 will be sufficient
for a deposit on a new-build property: you will usually need to have
savings as well to make up the shortfall.
No, government grants for first home buyers can't be used towards the
purchase of land. If you are buying land to build a property on, however,
it's possible to get stamp duty relief (relief on conveyancing tax). At the
time of writing, if you buy land to build a home on that costs less than
$281,200, you will not have to pay stamp duty, provided the combined income
of all applicants is less than $160,000 pa. Stamp duty on more expensive
land purchases then increases gradually, depending on price. A full
breakdown is available here (
Yes! Provided you meet the other eligibility criteria.
Yes! Permanent residents can get the first home grant, provided they meet all the other eligibility criteria.
No! This is a one-off payment. You cannot apply for a second grant. If you have previously been a home owner, in some circumstances you may be eligible for the grant, provided you haven't claimed it before.
It depends on the value of the property you wish to purchase! ACT does
offer concessions on stamp duty (conveyancing tax): applicants who are
buying a new-build property for less than $470,000 pay no stamp duty.
Between $470,000 and $607,000, stamp duty is paid on a sliding scale. No
concessions are offered above $607,000. Note that applicants must have a
combined income of less than $160,000 annually to be eligible for stamp
duty concessions. The stamp duty relief is available on new-build
properties only. At the current time, existing properties, even those which
have been significantly remodelled, aren't eligible.
The first home buyers' grant existing property rules are a little vague: a
property needs to have been "significantly renovated". This usually
involves a change of use (for example converting a commercial building into
a residential one), bringing a derelict building into use or converting a
much larger residential building into apartments. It's helpful to remember
that one of the aims of the home owner grant scheme is to stimulate the
new-build market: this means that commonplace renovations (for example
building an extension) will not be eligible.
The ACT first home owners' grant and stamp duty concessions are part of a broader package of measures intended to make it easier for first-time buyers to gain access to the property market. It is also intended to encourage the purchase of new-build properties, providing a boost to the construction industry and promoting development work. Although the grant provides a welcome addition to purchasers' finances, it's by no means sufficient for a deposit in most cases. Prospective buyers need to consider all options when it comes to ensuring their initial purchase is financially sustainable. For some people, this may mean opting for an existing property, which will be less costly to purchase than a new-build, even allowing for the grant.
Get in touch to find out more about the first home owners' grant and how you might benefit.