Time Running Out for Australian 1st Home Buyers
Boost Halved by 30th September and Expires on 31st December 2009
Aug 26, 2009
Since 1st July 2000, Australian first home buyers were eligible for a one-off national government grant of $7,000. In 2008, in view of the global economic downturn, the Australian Government established the First Home Owner Boost (FHOB) as an incentive to first home owner buyers and to help the housing industry.
Eligible first home buyers received a total benefit of $14,000 ($7,000 grant plus an additional $7,000 boost) if purchasing an established property or $21,000 ($7,000 grant plus an additional $14,000 boost) if purchasing a brand new property or constructing a home. The additional boost amounts were due to expire on 30th June 2009. However, they were extended for a specified period.
The main eligibility criteria for the First Home Owners Grant (FHOG) is that the applicants have to be Australian residents who have not owned a home prior to 1st July 2000.
Position as at 30th September 2009 for First Home Buyers
First home buyers who wish to take advantage of the full amount of the boost, which is $7,000 or $14,000, have until the 30th of September 2009 to find a house and sign the Offer and Acceptance Document. If this contract is not entered into and signed by the 30th of September 2009, then they will miss out on the full boost amount.
The Offer and Acceptance is a formal Contract of Purchase and Sale that is signed by the seller (vendor) and the purchaser (buyer) and includes various conditions of the sale and purchase that the parties agree to. The format of this document may vary from state to state within Australia.
The Level of the Boost from 1st October to 31st December 2009
Commencing on 1st October 2009, the amount of the boost will be halved. First home buyers who purchase an established property will only receive $10,500 ($7,000 grant plus $3,500 boost) and those purchasing or constructing a new home will receive $14,000 ($7,000 grant plus $7,000 boost). Again this is conditional on the eligible buyers entering into a contract and signing the document prior to 31st December 2009.
Government Grant After 1st January 2010
From the 1st of January 2010 the FHOB will no longer exist and the government grant will revert back to the original amount of $7,000 for both the purchase of an established property and for the purchase or construction of a new house.
Action Plan for First Home Buyers to Maximize the Boost
Australians who do not yet own a home should have a serious look at their finances and consider if home ownership is an option.
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