First home buyer grants and stamp duty concessions in Qld: what you're actually entitled to...

The First Home Owner Grant (FHOG)

The First Home Owner Grant is a one-off payment from the Queensland Government to eligible first home buyers. It is designed to help with the upfront costs of purchasing or building your first home.

How much is it? In Queensland, the FHOG is currently $30,000 for eligible contracts entered into from 20 November 2023 onwards. This is one of the most generous first home buyer grants in the country.

Who is eligible? To receive the FHOG in Queensland, you must:

• Be an Australian citizen or permanent resident

• Be 18 years or older

• Be buying or building a new home - the grant does not apply to established (existing) properties

• Intend to live in the property as your principal place of residence for at least 12 months, commencing within 12 months of settlement or construction completion

• Not have previously owned residential property in Australia

• Not have previously received a first home owner grant in any Australian state or territory

What counts as a 'new home'? A new home is one that has not been previously occupied or sold as a place of residence. This includes newly built homes, substantially renovated homes, and off-the-plan purchases. It does not include established homes.

Is there a price cap? Yes. The property value must not exceed $750,000 to be eligible for the FHOG.

How is it paid? If you're using a lender to finance your purchase, the grant is typically paid directly to your lender at settlement and applied to your loan. If you're a cash buyer (no mortgage), the grant is paid to you after you move in and provide evidence of occupancy.

Transfer duty concessions for first home buyers

Transfer duty - commonly known as stamp duty - is a state government tax on property purchases. In Queensland, first home buyers may be entitled to a full or partial concession on transfer duty, which can represent significant savings.

Full concession (no transfer duty payable): If you are buying a home valued at $700,000 or less and you meet the first home buyer eligibility criteria, you may pay zero transfer duty. On a $600,000 purchase, this saves you approximately $12,850.

Partial concession: If your property is valued between $700,000 and $800,000, you may be eligible for a partial concession - meaning you pay a reduced rate of transfer duty rather than the full investor rate.

Vacant land concession: If you are buying vacant land to build your first home, a transfer duty concession also applies for land valued up to $400,000.

Eligibility for transfer duty concessions:

• At least one buyer must be an individual (not a company or trust)

• You must not have previously owned a residence in Australia

• You must move into the property within 12 months of settlement

• You must live in the property for a continuous period of at least 12 months

• Unlike the FHOG, the transfer duty concession applies to both new and established homes

Can you access both the FHOG and the transfer duty concession?

Yes - in some circumstances. If you are buying a new home valued under $750,000, you may be eligible for both the $30,000 FHOG and a transfer duty concession, subject to meeting the eligibility criteria for each. This combination can represent a very significant saving on your total upfront costs.

What about the federal government's Home Guarantee Scheme?

Separate to Queensland's state-based grants and concessions, the Australian Government offers the Home Guarantee Scheme - a program that allows eligible first home buyers to purchase a property with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI).

LMI is typically required when a buyer's deposit is less than 20% of the property value, and it can add thousands of dollars to the cost of a purchase. The Home Guarantee Scheme effectively removes this cost for eligible buyers.

Places in the scheme are limited and open at the start of each financial year. Your mortgage broker is best placed to advise whether you qualify and how to apply.

Common mistakes first home buyers make with grants and concessions

• Assuming the FHOG applies to established homes. It doesn't. If you're buying an existing property, the FHOG is not available, though transfer duty concessions may still apply.

• Not moving in within 12 months. Both the FHOG and the transfer duty concession require you to move into the property within 12 months. Missing this window can result in having to repay the grant or pay full transfer duty.

• Buying in a trust or company name. Grants and concessions are generally only available to individuals. If you're considering a different ownership structure, get advice before you sign.

• Not telling your conveyancer upfront. Your conveyancer needs to know you're a first home buyer from the outset - the transfer duty concession is applied at settlement, and the FHOG application is typically lodged through your lender and can take some time, don't leave it until the last minute.

  
  

How Impact Legal helps first home buyers

As part of our service, we ensure that eligible first home buyers have the correct concessions applied at settlement and that your FHOG application is handled correctly. We'll ask you the right questions upfront so nothing is missed.

If you're buying your first home in Queensland and want to make sure you're getting everything you're entitled to, we'd love to help.

Get in touch at impactlegal.com.au or call us on 07 4015 3464.

Note: Grant amounts and eligibility criteria are subject to change. Always verify current figures with the Queensland Revenue Office or your conveyancer before making financial decisions.