First Home Buyer Grants and FHOG: Your Hidden Buying Power

First home buyer schemes are fragmented across Australia’s states and territories, and most buyers don’t fully exploit them. The federal First Home Owner’s Grant (FHOG) is just one piece; state-based schemes often deliver larger cash injections and land duty concessions.

The federal FHOG was restructured in 2024 and is now means-tested and income-capped. A first home buyer on a combined household income below the threshold (approximately $180,000 for singles, $360,000 for couples, depending on loan size) can access between $8,000 and $15,000. The key word is “below threshold”—if you’re a dual-income couple earning $190,000 combined, you’re ineligible. Run the calculation before assuming you qualify.

State schemes are more generous. Queensland offers up to $35,000 grant for a new build. Victoria offers up to $20,000 for new builds plus land duty concessions. New South Wales has a stamp duty exemption up to $800,000 for newly constructed homes. Western Australia offers grants and land duty relief up to $15,000. Each state has different property price caps and residency requirements, so the amount you qualify for depends entirely on where you’re buying.

Here’s where buyers often leave money on the table: they assume they’re ineligible for multiple grants. Many states allow you to claim their state grant and the federal FHOG simultaneously. You might unlock $15,000 federal plus $25,000 state, totalling $40,000. On a $500,000 purchase, that’s 8% of your equity deposit handed to you before you’ve applied for a mortgage.

Timing affects eligibility. Some grants apply to new builds only (completed within the last 12 months). Others apply to existing homes. Renovated properties fall into a grey zone. If you’re planning to renovate a $400,000 house, clarify upfront whether your state’s grant applies post-renovation and under what conditions.

Construction date verification is strict. A state grant might require a completion certificate from the local council dated within the past 12 months. Vendor fraud—claiming a 1975 house was completed in 2023—attracts criminal liability. Only claim what you legitimately qualify for.

For investment properties, grant schemes don’t apply. They’re reserved for principal place of residence purchases. However, some schemes allow you to claim a grant on one property and then upgrade to another within a set period; check your state’s rules.

Mortgage serviceability improves by the grant amount. A $40,000 grant reduces the loan amount from $460,000 to $420,000, dropping your monthly repayments by roughly $200 and boosting your borrowing capacity. Lenders assess serviceability on the reduced loan figure once the grant is confirmed.

The application process typically happens post-settlement or pre-settlement, depending on the state. Some grants disburse to your solicitor’s trust account before settlement; others come to you after purchase. Plan your cashflow around these timelines; don’t assume the grant lands instantly.

Disclaimer: This article provides general information only and should not be taken as financial or legal advice. Grant eligibility, amounts, and state rules change regularly. Consult your state revenue office and mortgage broker before purchasing.