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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.

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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 to 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 available to assist first home buyers to get started with their first home. The FHOG in WA only applies to first home buyers who are building or purchasing a newly built home. 

At Keystart, we allow you to use the FHOG funds towards your home loan deposit, to help you get started on your home ownership journey 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 your deposit yourself. 

FHOG 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 to building or buying an existing home.

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. To make this happen, we advance (pay on your behalf) an amount equivalent to the FHOG to your settlement agent to be available at settlement. This is done before the Office of State Revenue has actually released the funds. This amount will be shown as a debit in your loan account.

Depending on your situation, these funds can also be used to cover Keystart's fees and even your settlement agent fees. Don't worry - your broker or Keystart Home Loan Specialist will go through the fees with you and will let you know what you may be required to cover well before settlement.  

Later, when the first invoice has been paid to your builder, the Office of State Revenue will pay the FHOG 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.

So in effect, these funds are added to your loan balance when we advance them (shown as a debit), and then once the FHOG has paid to Keystart, that amount is taken off your loan balance (shown as a credit). You can see this activity in your loan statement. 

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 advances these funds to Sarah's settlement agent to be 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 pays the FHOG funds directly to Keystart. We process that as a credit back onto Sarah's 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 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, we advance the grant amount from your loan account to your settlement agent. 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. 

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 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 as 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.

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