First home-owner grant changed in Victoria
This month’s Victorian state budget saw an increase to the First Home-Owner Grant, but the First Home-Owner Boost will be scrapped from January 2010. However, the First Home Bonus and will First Home-Owner Regional Bonus will continue.
The grant
Victorians entering into contracts to buy their first home from 1 July, will receive an additional grant of $11,000 for new homes, and $2,000 for existing homes. This takes the full grant to $18,000 (new homes) and $9,000 (existing homes), for the 2009-10 financial year.
While the grant will continue not to be means-tested, after 1 January 2010 it will be restricted to homes costing less than $600,000 (currently there is no price restriction).
The bonus
The First Home Bonus will also be changed. Currently, first home buyers may also be entitled to an additional $3,000 (existing homes) or $5,000 (new homes) - provided the house costs less than $500,000.
For contracts entered into from 1 July, the bonus drops to $2,000 for established homes, but jumps to $11,000 for new homes, while the property purchase-price ceiling rises to $600,000.
The regional bonus
On top of the First Home Bonus, buyers in regional Victoria may also qualify for the First Home-Owner Regional Bonus. However, this only relates to new houses, not existing ones.
Currently, those buying their first (new) house may qualify for an additional $3,000 bonus (which is on top of the $5,000 First Home Bonus). However, from for contracts entered into after 1 July, an additional $4,500 bonus is also available (again, this will be on top of the $11,000 bonus).
For a full list of eligible Victorian regional municipalities, go to: http://www.sro.vic.gov.au/sro/srowebsite.nsf/taxes_firsthome_bonus_regional.htm
The boost
This is another payment for which first home buyers may qualify - but not for long. While it’s a Federal Government initiative, the Victorian Government administers the scheme.
Currently, the boost offers an extra $7,000 (existing homes) and an extra $14,000 (new homes).
However, for contracts entered into from 1 October to 31 December, the amounts halve. The scheme will then be scrapped in 2010, so Victorian first-home buyers entering into contracts from 1 January will not have access to the First Home-Owner Boost.
While the boosts, bonuses and grants are helpful to first-home buyers, you should not time buying your first home solely upon the dates above. As with any investment - but particularly as this will be the single largest for most people! - you should take your whole financial situation into account. If you would like help understanding the impact of buying a home on your overall financial situation, contact Summerhill Financial Services.
Source: Victorian Government, State Revenue Office http://www.sro.vic.gov.au/sro/srowebsite.nsf/rebates_fhog_overview.htm
Table: Summary of Potential Payments
| Contract date | Type of house | Possible total payments (depending upon eligibility) |
| From 1 January 2010 to 30 June 2010 | Established |
$9,000 |
| Newly constructed (metropolitan Victoria) |
$18,000 |
|
| Newly constructed (regional Victoria) |
$22,500 |
|
| From 1 October 2009 to 31 December 2009 | Established |
$12,500 |
| Newly constructed (metropolitan Victoria) |
$25,000 |
|
| Newly constructed (regional Victoria) |
$29,500 |
|
| From 1 July 2009 to 30 September 2009 | Established |
$16,000 |
| Newly constructed (metropolitan Victoria) |
$32,000 |
|
| Newly constructed (regional Victoria) |
$36,500 |
|
| From 14 October 2008 to 30 June 2009 | Established |
$17,000 |
| Newly constructed (metropolitan Victoria) |
$26,000 |
|
| Newly constructed (regional Victoria) |
$29,000 |
|
| From 6 May 2008 to 13 October 2008 | Established |
$10,000 |
| Newly constructed (metropolitan Victoria) |
$12,000 |
|
| Newly constructed (regional Victoria) |
$15,000 |
|
| From 1 January 2007 to 5 May 2008 | Established |
$10,000 |
| New |
$12,000 |
|
| From 1 January 2006 to 31 December 2006 | Established and new |
$10,000 |
| From 1 May 2004 to 31 December 2005 | Established and new |
$12,000 |
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