Skip to main content

Keystart's guide to the first home buyer benefits

First home buyers may be eligible for both the First Home Owner Grant, a one-off payment funded by the State Government, as well as the stamp duty concession.

If you're buying your first home, the WA State Government has two incentives to help you get underway.

Stamp duty concession

If you're a first home buyer, a concessional rate of transfer duty (also referred to as stamp duty) will apply if the value of your property is below certain thresholds. This is an incentive from the State Government to encourage first home buyers to get into their own home. This benefit applies for new and established homes. 

Different rates apply depending on whether you buy a new home, an established home, or a house and land package.

You can calculate the amount of duty payable by using the Department of Finance's Transfer Duty Calculator.

Am I eligible for the stamp duty concession?

To be eligible for the stamp duty concession you'll need to be a first home buyer. If you, or your partner or spouse, has previously owned a home, you won't be eligible. There are some other criteria - you can read more on the Office of State Revenue website.

You'll need to complete a First Home Owner Grant application to apply for the stamp duty concession. This also applies if you are buying an established home.

Read more at the Office of State Revenue

First Home Owner Grant

The First Home Owner Grant (FHOG) WA is a one-off payment funded by the Government of Western Australia and administered by the Department of Finance, Office of State Revenue. The grant is also to assist first home buyers get started with their first home. 

Keystart allows you to use the FHOG funds towards your home loan deposit, so you can get started on your home ownership dream sooner.

The FHOG in WA only applies to first home buyers who are building or purchasing a newly built home.  It is no longer available if you choose to buy an established home, however you may be eligible for the Home Buyers Assistance Grant towards minor expenses.

There are benefits to buying an established home too - you may find it useful to read our guide.

Build or buy an existing home: A guide

Am I eligible for FHOG?

The first criteria to be eligible for FHOG is that you need to be a first home buyer. If you, or your partner or spouse, has previously owned a home, you won't be eligible. There are some other criteria - you can read more on the Office of State Revenue website.

Read more at the Office of State Revenue

How Keystart processes your FHOG

For Keystart customers, we allow you to use the FHOG funds towards your deposit. This means FHOG is advanced by us to your settlement agent before the Office of State Revenue has actually released the funds. By allowing you to use the FHOG funds towards your deposit and fees, you may be able you to get into your own home sooner.

So, the FHOG is not paid directly to you. If you wanted to receive the FHOG grant directly, then you would need to save the required deposit yourself. Consider how long it would take you to save $10,000. Keystart allows you to get started sooner. 

Keystart advances (pays on your behalf) an amount equivalent to the FHOG. These funds are then able to be used towards your deposit and some of the costs of settlement. We advance the funds to your settlement agent just before settlement occurs. 

Once the first invoice has been paid to your builder, the Office of State Revenue pay the grant to Keystart. If you are buying a newly built home the Office pays the grant after settlement. These funds will then be credited to your loan account.

Let's look at a couple of examples:

Sarah is getting a new home built. She is eligible for the FHOG, which means those funds will be used towards her deposit and some of the costs of settlement.  Keystart will advance, or pay, these funds to Sarah's settlement agent so that they are available for settlement. That advance is shown as a debit on her loan balance. 

Once her home reaches the first invoice stage, the Office of State Revenue will pay the FHOG funds directly to Keystart. Sarah will see a credit for this amount in her loan balance.

Sarah's loan account transactions (simplified example)

01/07FHOG advance-$10,000
10/07Land amount- $200,000
 Balance-$210,000
01/12Builder’s first invoice: $60,000-$60,000
 Balance -$270,000
15/12Office of State Revenue FHOG payment$10,000
 Balance-$260,000

Tom's loan account transactions (simplified example)

Tom is buying a newly built home and is eligible for the FHOG. 

01/07FHOG advance-$10,000
10/07Settlement funds- $400,000
 Balance-$410,000
15/12Office of State Revenue FHOG payment$10,000
 Balance-$400,000

* Note these are simplified versions of a loan account for illustration purposes only. These figures do not take into account interest or additional transactions. 

Completing the FHOG Application

First, you need to advise us if you think you're eligible for the FHOG. Then, once you're at your pre-approval stage, you'll receive a FHOG application from your mortgage broker or your Keystart home loan specialist. 

This form will need to be completed, signed and witnessed and either the original or a certified copy of the form returned to Keystart. 

We will then lodge your FHOG application electronically to be approved by the Office of State Revenue.

Interest on FHOG

In order for you to be able to use the FHOG funds towards your deposit, Keystart advances the grant amount from your loan account to your settlement agent.

You may notice this entry in your first loan statement as a debit amount. 

Since we are advancing this money on your behalf, we charge interest on the advanced amount until we actually obtain your grant funds from the Office of State Revenue. The Office will release the FHOG funds once it is satisfied your build is underway. For construction this is after the first invoice has been paid to your builder. If you are purchasing a newly built home the funds will be paid after settlement occurs. 

The monies are then paid directly to Keystart. This will appear as a credit amount in your loan account. 

Once Keystart has received the FHOG funds, we consider the advance amount to be paid off, so you will no longer pay interest on this component. 

You should expect for your grant funds to be credited to your Keystart account approximately two weeks after the first progress payment is made to your builder. If you’ve purchased a newly built home, you should expect this to occur approximately two weeks after settlement. 

When the funds come back into your loan account you'll see a credit for the FHOG amount. These funds are not available for redraw, for loan repayments or to be used towards any additional costs but are treated a permanent reduction against the loan balance.

Keystart recommends that you seek your own independent financial advice prior to making any decisions about your financial needs. Any examples given are provided for illustrative purposes only.

Let's get started

Want to find out more about our home loans?