Guide to Grants and Assistance

Guide to Grants and Assistance

Are you buying your first home, a member of the Defence Force, have a disability, low income or are of Aboriginal/Torres Strait Islander descent find out what Grants and Assistance you are entitled to...

If you're saving hard for a deposit for your first home, make sure you familiarise yourself with the grants and assistance available from the Government - State and Federal - which may give you an extra cash injection and help you make your purchase that little bit sooner.

First Home Owners Grant
Transfer and Mortgage Duty Exemptions and Rebates
Defence Home Owners Scheme
Special Needs
Investment Loans

FIRST HOME OWNERS GRANT
To offset the impact of the introduction of the GST, the Commonwealth requested that the States and Territories assist first home buyers through the establishment of the First Home Owners Grant (FHOG).

The broad principles of the grant are:

• Eligible applicants from 1 July 2000 are entitled to a one-off $7,000 payment.
• Eligible applicants must be natural persons who are Australian citizens or permanent residents, who are buying or building their first home in Australia. (Requirements vary between jurisdictions regarding the number of applicants who must be an Australian citizen or permanent resident and how old an applicant must be).
• To qualify for assistance, neither the applicant nor their spouse (or de facto) must have owned a home prior to 1 July 2000, either jointly, separately or with some other person.
• Neither the applicant nor their spouse (or de facto) must have owned and occupied a home after 1 July 2000.
• Neither the applicant nor their spouse (or de facto) must have claimed this grant previously.
• Entering into a binding contract or commencement of building, in the case of owner-builders, must have occurred on or after 1 July 2000.
• An eligible home will be located in Australia and will be a new or established house, home unit, flat or other type of self contained fixed dwelling that lawfully can be used as a place of residence within 12 months of settlement or completion of construction of the home. (There are minimum periods of occupancy required by jurisdictions).
• Application for the grant must be made within 12 months of completion of construction or settlement of the home.
• Assistance will not be means tested.
• There is no tax payable on the grant.
• Joint applicants will be restricted to a single application for a single property and only one payment of $7,000 will be made.

If the consideration of the home is less than $7,000 then the grant amount paid to the applicant will equal the consideration.

The First Home Owners Grant is available to all who qualify according to the above principles regardless of income, assets, savings or the price and location of the property you wish to buy.

If you would like more information on the FHOG, you can visit the FHOG website, or your States Office of State Revenue website. These Web addresses can be found on the links page. [top]

TRANSFER AND MORTGAGE DUTY EXEMPTIONS AND REBATES
As a first home buyer you may also qualify for exemption or discounts to mortgage and transfer duties. The discount or exemption amount will depend on the State in which you live, and the purchase price of the property. Some States also offer duty relief benefits for first home buyers. [top]

DEFENCE HOME OWNERS SCHEME
The Defence Home Owners Scheme was introduced in 1991 to assist eligible members and ex-members of the ADF to purchase their own home. This is done by providing a subsidy on the interest of a home loan borrowed from the approved lender. [top]

There are legislative requirements that an eligible person must meet before payment of the subsidy can commence. The amount of subsidy you are eligible for will vary depending on the length and type of your service and whether you are still in active service or have been discharged.

SPECIAL NEEDS
If you have special needs, a disability, are of Aboriginal or Torres Strait Islander descent, or have a low income, you may be entitled to assistance from your State Government. For more information contact your State Government, or visit their website which can be found in the links section. [top]

INVESTMENT LOANS
Do you need a home loan for investment purposes?

Canfinance can assist you in financing your investments & if you are considering property our investment property buyers agent Park Heath can provide specific advice to suit your needs.

Investment home loans are essentially the same as home loans used for owner occupied purposes - interest rates, facilities, options etc.

Investment loans can be used for property purchase, or to purchase a share portfolio (The debt may need to be secured by property). Either way, the use of the funds determines whether a home loan is for investment or personal use.

It is always wise to seek professional advice when making a large financial decision to ensure you are will informed on the taxation laws that may influence your decision. Please ensure that you speak to your accountant to ensure that your individual circumstances are considered. If appropriate Canfinance can provide you with a referral to a range of established & reputable accountants. If you prefer to invest in property, there are two primary ways to build your wealth both of which can be assisted via Park Heath (link) which are part of our Canberra Financial Services offering.

The first is through capital gain. If you purchased a property for $250,000.00 and sold it for $400,000.00, and your repayments and costs were $80,000.00 - your gross capital gain would be $70,000.00. Obviously you are relying on the property value increasing to make your profit.

The second is through building equity. Again if you purchase a property for $250,000.00 and borrowed $220,000.00 you initially have $80,000.00 equity. If after a number of years you have reduced your debt to $150,000.00, and your property is now worth $400,000.00, your equity is $250,000.00.

It is important to find out which way will suit your personal circumstances and give you the greatest return.

Think about your financial goals, are they long term or short term? Do you want to pay the loan off quickly, or do you want to obtain the greatest tax benefit?

Once you have an investment strategy in place, it is now time to speak with Canfinance who will help you complete your investment goals by finding the right investment home loan for your individual needs. It would be beneficial to read the preceding information on 'Types of Home Loans' to give you an idea on what home loan will suit you. [top]