ML Blog

Buying a House-ADF Schemes & Home Buyer Grants Explained

So you’ve decided that now is the right time to look at buying a house….yay, go you! That is no mean feat. But which grants and schemes can an ADF member access when buying a property and how do they all actually work?

I don’t know about you but sometimes you just need entitlements explained in plain old non-military speak.

So let’s get to the details about all you *and the ADF member* might qualify to access through things like the First Home Owner Grant, First Home Loan Deposit scheme which is now called the First Home Guarantee Scheme, First Home Super Saver scheme, DHOAS, HPAS, and HPSEA. *don’t worry all of those letters will be explained below*

 

The First Home Owner Grant

What is it? The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership.

Under the scheme, a one-off grant is payable to first homeowners that satisfy all the eligibility criteria.

It is a national scheme funded by the states and territories and administered under their own legislation.

To Find out more about the specific eligibility criteria for your state or territory, click through the relevant link below for details.

 

ACT- Called the Home Buyer Concession Scheme (including First Home Owner Grant)

Who is eligible to apply?

-All buyers of the home or land must be individuals of at least 18 years old.

-The total gross income of all buyers, including their partners (if any), must not be greater than the relevant income threshold below.

-All buyers, including their partners (if any) must not have owned any other property in the last two years. A partner includes your spouse, civil union partner or de facto partner.

-At least one buyer must live in the home continuously for at least one year, starting within 12 months of the date of completion (settlement date) or the date that a certificate of occupancy has been issued.

What if you get posted? When it comes to the eligibility requirements, are there any ADF exemptions in the ACT? Maybe

Requirements for living in the property;

residence period means—

-a continuous period of at least 1 year or a shorter period (including no period) determined by the Commissioner if:

-the shorter period is requested, in writing, for a transferee not later than 18 months after the residence start date, and the Commissioner is satisfied that the transferee is unable to occupy the eligible property because of an unforeseen circumstance (like being posted to another location).

See this document for further details file:///C:/Users/yeu18/Downloads/2020-205.PDF or visit  https://www.revenue.act.gov.au/home-buyer-assistance/home-buyer-concession-scheme/home-buyer-concessions-from-1-July-2019  for all of the relevant details.

 

 

NSW- Called the First Home Owner (New Homes) Grant

Who is eligible to apply?

To qualify for the First Home Owner (New Homes) Grant;

-Each applicant must be at least 18 years old.

-You must be a first home buyer as a person, not as a company or trust

-At least one applicant must be a permanent resident or Australian citizen.

-You or your spouse, partner or co-purchaser must not have previously owned a home before 1 July 2000.

-You must occupy your first home as your principal place of residence within 12 months of the construction or purchase of your home and the minimum period of occupancy is six continuous months.

 

What if you get posted? When it comes to the eligibility requirements, are there any ADF exemptions in NSW? YES

Requirements for living in the property;

-You must occupy your first home as your principal place of residence within 12 months of the construction or purchase of your home and the minimum period of occupancy is six continuous months.

If you’re a member of the Australian Defence Force you may be exempt from the six month residence requirement, providing all buyers are on the New South Wales electoral roll.

Visit https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/new-homes for all of the relevant details.

There is also the First Home Buyers Assistance Scheme and the First Home Buyer Choice (Property Tax) in NSW

https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/assistance-scheme

https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/first-home-buyer-choice

 

 

QLD- Called the First Home Owners’ Grant

Who can apply?

-You (and any co-applicants for the grant) are a natural person (an individual) aged 18 years or older.

-You must be an Australian citizen or permanent resident (or applying with someone who is).

-You or your spouse must not have previously received a first home owner grant in any state or territory of Australia.

-You or your spouse must not have owned residential property in Australia on or after 1 July 2000 that you lived in before 1 July 2000, whether you lived in it or not.

-The grant is not available to purchase investment properties.

-You must move into your brand-new home as your principal place of residence within 1 year of the completed transaction and live there continuously for 6 months.

When it comes to the eligibility requirements for the First Home Buyer Assistance Scheme, are there any ADF exemptions? MAYBE

In some exceptional circumstances, the Commissioner may use discretion in relation to some eligibility criteria if you move into the home after 1 year or live in the home for less than 6 months.

Visit https://www.qld.gov.au/housing/buying-owning-home/financial-help-concessions/qld-first-home-grant/payment for all of the relevant details.

 

NT- Called the First Home Owner Grant

Who can apply?

From 7 May 2019, if you are buying or building a new home, you can apply for a First Home Owner Grant (FHOG) of $10,000. (From 1 January 2020, you can apply for the First Home Loan Deposit Scheme)

-If you are purchasing a new home that has never been previously lived in or sold as a place of residence.

When it comes to the eligibility requirements for the First Home Buyer Assistance Scheme, are there any ADF exemptions? MAYBE

At least one applicant for the FHOG must live in the home as their principal place of residence within 12 months of completion. They must stay there for a continuous period of at least six months.

In special circumstances, the Commissioner can change this requirement.

To find out more, read the Commissioner’s guideline on discretion to exempt or vary compliance with the eligibility criteria.

Visit https://nt.gov.au/property/home-owner-assistance/first-home-owners/first-home-owner-grant for all of the relevant details.

 

WA- Called the First Home Owner Grant

Who can apply?

The grant is not means-tested, so your income will not affect your eligibility for the grant.

-You must be 18 years or over at the time of making application. If you’re under 18, you may be able to apply for an exemption from the age requirement.

-At least one applicant must be an Australian citizen or a permanent resident at the time of making application.

-Applicants and/or their spouses or de facto partners cannot have previously received the grant or first home owner rate of duty from any jurisdiction in Australia.

-Applicants cannot have owned residential property anywhere in Australia before 1 July 2000

-You must occupy the home as your principal place of residence for a continuous period of at least six months commencing within 12 months of settlement if purchasing a home or within 12 months from the date of completion of building a home.

-You must hold a relevant interest (ownership) in the land on which the home is situated and must own the home in your own capacity. A relevant interest may include a right of occupancy.

-If you own the home as a trustee, it must be held in trust for a person with a legal disability.

When it comes to the eligibility requirements for the First Home Buyer Assistance Scheme, are there any ADF exemptions? YES

You must start living in your home within 12 months of completion of the eligible transaction. Once you have moved in and started living in your home, you must live in the home as your principal place of residence for a continuous period of at least six months.

Although, If your circumstances change after you’ve entered into a contract and you can’t meet the residence requirements an exemption from complying with the residence requirements may be given if there are, in the Commissioner’s opinion, good reasons;

-The applicant’s employment objectively or practically does not allow them to live in the

home due to a change in the place of employment which is a significant increase in distance from

the home or forced transfer by an employer which requires relocation of the applicant to continue

their usual employment.

Check out this doc here https://www.wa.gov.au/system/files/2022-09/CP-FHOG-DA-39.pdf

Visit https://www.wa.gov.au/organisation/department-of-finance/fhog?utm_source=redirect&utm_medium=finance_wa_fhog for all the relevant details.

 

 

SA- Called the First Home Owners Grant

Who can apply?

You may be eligible to apply for the First Home Owners Grant in South Australia if;

-At least one of the applicants is an Australian citizen or has permanent residency in Australia. New Zealand citizens permanently residing in Australia who hold Special Category Visas may also apply.

-The applicant(s) or their spouse(s)/domestic partner(s) must not have previously owned a residential property anywhere in Australia prior to 1 July 2000.

-The applicant(s) or their spouse/domestic partner must not have acquired residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence continuously for 6 months.

-All applicants must occupy the home purchased or built as their principal place of residence for a continuous period of at least 6 months commencing within 12 months after completion of the eligible transaction.

-Each applicant must be a natural person (not a trustee or company) except in the cases of legal disability.

-Each applicant must be at least 18 years of age at the time of making application for the first home owner grant.

-The property purchased or constructed has a market value of $575,000 or less.

When it comes to the eligibility requirements for the First Home Buyer Assistance Scheme, are there any ADF exemptions? MAYBE

An applicant is required to occupy their property as their principal place of residence for a continuous period of least 6 months, commencing within 12 months after the completion of their transaction but the Commissioner may, if the Commissioner considers there are good reasons for doing so, vary an applicant’s residence requirement at any time by approving a shorter residence period or a longer completion period (or both).

Check out this doc here https://www.legislation.sa.gov.au/__legislation/lz/c/a/first%20home%20and%20housing%20construction%20grants%20act%202000/current/2000.25.auth.pdf page 10 12—Criterion 5—Residence requirement or visit https://www.revenuesa.sa.gov.au/first-home-owners-grant for all the relevant details.

 

VIC- It is called the First Home Owner Grant

Who can apply?

You may be eligible to apply for the First Home Owner Grant in Victoria if;

-you or your spouse/partner have not previously received a First Home Owner Grant in Australia, owned a home or other residential property in Australia, either jointly or separately, before 1 July 2000.

-If you or your spouse/partner have not occupied, for a continuous period of at least six months, a home which either of you owned or part-owned on or after 1 July 2000 in Australia.

-You occupy the home as your principal place of residence (PPR) for at least 12 months, commencing within 12 months of settlement or completion of construction.

-Be aged 18 or over (discretionary).

-Be an Australian citizen or permanent resident.

When it comes to the eligibility requirements for the First Home Buyer Assistance Scheme, are there any ADF exemptions? MAYBE

At least one applicant must live in the home as their principal place of residence for at least 12 continuous months commencing within 12 months of completion of the eligible transaction (residency requirement).

It is the responsibility of the applicant to satisfy the Commissioner that they have met the residency requirement. Applicants may be required to verify this later by providing evidence supporting their period of occupancy.

Should you not meet the residency requirement, you must notify the SRO in writing within 14 days of this notifiable event, and repay the grant.

In exceptional circumstances, the Commissioner may use discretion relating to the eligibility criteria. All decisions relating to the eligibility of an applicant are made by the Commissioner.

Visit https://www.sro.vic.gov.au/first-home-owner for all relevant details.

 

TAS- It is called the First Home Owner Grant

Who can apply?

A first home owner grant is available to eligible applicants who purchase or build a new home in Tasmania from 1 July 2016. ​​A new home is a home that has not previously been occupied or sold as a place of residence and includes kit homes.​

To be eligible to receive the First Home Owner Grant of $30 000 in Tasmania, you must;

-be a natural person (not a company).

-be 18 years old or over.

-be an Australian citizen or permanent resident (if more than one applicant, only one applicant is required to be an ​Australian citizen or permanent residence).

-occupy the home as your principal place of residence for a continuous period of at least six months commencing within 12 months of completion of an eligible transaction​.

-applicant(s) or their spouse must not have owned a residential property in Australia before 1 July 2000

-applicant(s) or their spouse must not have owned and occupied a residential property for more than six months in Australia after 1 July 2000 or have received the first home owner grant before.

 

When it comes to the eligibility requirements for the First Home Buyer Assistance Scheme, are there any ADF exemptions? MAYBE

Should you have good reasons for not completing building works within the specified time frame, you can apply to the Commissioner of State Revenue to exercise discretion to extend the period in which you were required to comply.

To qualify for the FHOG, you (and any other applicant to your grant application) must move into the property for which you received the Grant within 12 months of the date of completion and retain ownership of the property and occupy it for a continuous period of at least six (6) months as their principal place of residence.

If you can’t meet the residency requirements you must notify the State Revenue Office and repay the Grant within 14 days. In exceptional circumstances (that is, those outside the control of the applicant) the Commissioner of State Revenue has the discretion to extend the 12-month period in which you must commence occupying your home or to reduce the six-month period for which you must occupy your home or exclude one or more of the applicants (but not all applicants) from the requirement to comply with the residency requirement.

For more details refer to the First Home Owner Grant Commissioner’s Discretion or go to sro.tas.gov.au/resources/guidelines and select First Home Owner Grant.

Visit https://www.sro.tas.gov.au/first-home-owner/eligibility for all relevant details.

 

 

 

The Home Guarantee Scheme (HGS)

What is it?  The Home Guarantee Scheme (HGS) is an Australian Government initiative to support eligible home buyers to purchase a home sooner. The Scheme is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government.

The HGS includes:

The First Home Guarantee (FHBG)- to support eligible first home buyers to buy their first home sooner, with a deposit as little as 5%. 35,000 places are available each financial year

To find out more details click through the link https://www.nhfic.gov.au/support-buy-home/first-home-guarantee

 

The Regional First Home Buyer Guarantee (RFHBG)– to support eligible regional first home buyers to buy a home in a regional area. From 1 October 2022, 10,000 places are available each financial year to 30 June 2025

To find out more details click through the link https://www.nhfic.gov.au/support-buy-home/regional-first-home-buyer-guarantee

 

The Family Home Guarantee (FHG)– to support eligible single parents with at least one dependent child to buy a home, with a deposit as little as 2%. 5,000 places are available each financial year to 30 June 2025.

To find out more details click through the link https://www.nhfic.gov.au/support-buy-home/family-home-guarantee

 

When it comes to the eligibility requirements for the First Home Guarantee, the Regional First Home Buyer Guarantee and the Family Home Guarantee are there any ADF exemptions? ADF members have been considered and there are some exemptions available.

 

The First Home Super Saver Scheme

What is it? The First Home Super Saver (FHSS) Scheme allows people to save money for their first home inside their super fund.

From 1 July 2017, you can make voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions into your super fund to save for your first home. You can then apply to release your voluntary contributions, along with associated earnings, to help you purchase your first home. You must meet the eligibility requirements to apply for the release of these amounts.

 

Who can apply? You can use this scheme if you are a first home buyer and both of the following apply:

 

-You will occupy the premises you buy or intend to as soon as practicable.

-You intend to occupy the property for at least 6 months within the first 12 months you own it, after it is practical to move in.

-You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $50,000 contributions across all years. You will also receive an amount of earnings that relate to those contributions.

-You must be 18 years old or older to request a FHSS determination or a release of amounts under the FHSS scheme. However, you can make eligible contributions before you are 18 years of age.

Also, you must have:

-never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia (unless the Commissioner of Taxation determines that you have suffered a financial hardship).

-not previously made a FHSS release request under the FHSS scheme.

Eligibility is assessed on an individual basis. This means that couples, siblings or friends can each access their own eligible FHSS contributions to purchase the same property. If any of you have previously owned a home, it will not stop anyone else who is eligible from applying.

Visit https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/first-home-super-saver-scheme/ for all relevant details.

 

Duty Concessions (stamp duty)

Stamp duty is a general tax imposed by the state or territory government on the purchase or transfer of almost any real estate.

Available stamp duty exemptions and concessions can significantly reduce the costs associated with buying or transferring property, especially for first home buyers.

Stamp duty is just one of the few settlement costs, alongside conveyancing fees, valuation and mortgage registration, that purchasers need to allow room for in their budget.

Stamp duty is decided by each state or territory government, not the federal government, so rates and exemptions/concessions will vary.

 

Defence Home Ownership Assistance Scheme aka DHOAS

 

What is DHOAS? The Defence Home Ownership Assistance Scheme assists current and former ADF members and their families to achieve homeownership. DHOAS is administered by the Department of Veterans’ Affairs on behalf of the Department of Defence.

 

The Scheme is aimed at improving ADF recruitment and retention, and the longer you serve in the ADF, the more entitlement you accrue under DHOAS and the longer you can receive assistance.

Recent changes to the Defence Home Ownership Assistance Scheme Act 2008 (the Act) will remove the 5-year deadline for separated ADF veterans to apply for their final subsidy certificate and decrease the minimum service period.

To be eligible, you must have;

-completed a qualifying period of service (recently changed from a minimum of 4 years service to now 2 years)

-accrued a service/subsidy credit

The longer your ADF member stays in defence, the more benefit they get under the DHOAS. To find out more details about the 2022-2023 subsidy tiers, check out the DHOAS website here

 

But how does it actually work? Once you have been approved, you will be emailed a certificate of entitlement, and that is all you need to prove your DHOAS eligibility when you come to the bank for your home loan. So, if you’re thinking about accessing DHOAS, it isn’t necessary that you have your certificate of entitlement before you come and speak to the bank. You can get your loan application underway before you receive your certificate, and as long as you have your certificate to the bank before you proceed to settlement, then it’s all fine.

Depending on the amount you are eligible to receive, a percentage of your interest on your DHOAS home loan is then paid into your loan account each month. It’s basically about helping you pay off your loan early.

For the full eligibility criteria, further info and how to apply, check out this link.

https://www.defencebank.com.au/dhoas

 

Home Purchase Assistance Scheme aka HPAS

 

So we’ve covered various Home Owner grants, schemes and DHOAS, but what else is available?

 

Well, I’m glad you asked because there is this thing offered by Defence called the Home Purchase Assistance Scheme aka HPAS.

 

HPAS comes as a lump-sum payment of $16,949 *before tax*, and its purpose is to assist the ADF member to purchase their own home.

 

To be eligible to receive a HPAS payment, the ADF member can’t have received HPAS before. HPAS is actually only payable once in an ADF member’s entire period of service. You have to purchase the home in your current (or new) posting location. On the day that you sign the contracts, it’s expected that the ADF member will serve in the location for 12 months after the purchase, and the ADF member will live in the house for the remainder of their posting at that location. If you are MWD(U) *member with dependent unaccompanied*, the ADF member needs to remain as categorised as MWDU for the next 12 months.

 

But if you check all of those boxes and ARE eligible to receive HPAS, you will actually receive the lump sum payment BEFORE you need to pay your house deposit because you’re considered to have purchased a home when you have signed either the contract to purchase the home or the agreement for it to be built.

 

Keep in mind though, the amount the ADF member is eligible for is affected if a non-ADF member (who isn’t a recognised partner) is joint owner of the property. So, for example, if the ADF member purchased the property with you and you were not officially listed as their partner or the ADF member purchased with a friend, sibling etc and you or they were listed as joint owner of the property then the ADF member would only be eligible to receive 50% of that $16,949 lump sum payment.

 

Home Purchase Sale Expenses Allowance aka HPSEA

 

So that’s HPAS, but did you also know there is an allowance called the Home Purchase or Sale Expenses Allowance aka HPSEA?

 

HPSEA is an allowance for the reimbursement of reasonable costs to an ADF member when they sell a home at the time they’re being posted to a new location; or if they sell in their previous posting location and buy again in the new location. This allowance covers stuff like the sale and purchase costs, including real estate agent’s commissions, stamp duty, solicitor’s fees. HPSEA is basically to compensate ADF members for the high costs of selling and buying. The amounts that you’ll receive through this allowance depend on your costs.

 

So obviously, I have only touched on the main home buyer grants and schemes and ADF entitlements you can potentially access (dependent on eligibility) as a new homeowner and partly as a return property owner.

 

It can kind of, sort of get confusing when it comes to what you can and can’t access, but I hope episode 145 of the Military Life Podcast (see below link to listen) and this Blog article gives you a starting point with what to look into further or a reminder about what is available.

 

There are various eligibility requirements in different states and territories and minimum service periods, but there are definitely some great benefits available.

 

To find out more info about the above Home Buyer grants and schemes, DHOAS, HPAS, and HPSEA, click on the links provided above or listen to episode 145 (link below) of the Military Life Podcast.

Don’t forget that if you are in the market for a DHOAS loan or would like to look into any of the above in further detail, get in contact with Defence Bank who are one of the few banks approved to offer DHOAS loans. Visit the Defence Bank website or call 1800 033 139.

*Any advice contained in this podcast is general advice only and doesn’t take into account your personal circumstances. All applications for credit at Defence Bank are subject to approval under credit criteria.

*Above Information current as of Feb 2023*