Buying your first home is simpler when the deposit is not a wall but a plan. The First Home Owner Grant is a cash boost that helps cover part of the entry cost on eligible new homes. In this article, we’ll explain how FHOG works across Australia, how it interacts with other deposit support tools, and how to align timing so the grant actually lands when you need it. We also show how we pair FHOG with our Power Up Elite program to remove the LMI hurdle and the deposit barrier entirely.
What is FHOG and How Does It Work?
The First Home Owner Grant is a one off payment for eligible first home buyers who purchase or build a qualifying new home. Each state and territory runs its own scheme. The core features are the same. You must be a genuine first home buyer. You must intend to live in the property as your principal place of residence for a minimum period. The property must meet the local definition of a new home. In most jurisdictions the grant does not apply to established homes.
Grant amounts and property value caps are set by each state or territory. Payment timing also varies. If you apply through an approved lender or agent the grant is usually credited to your loan at settlement for a purchase or at an early construction stage for a build. If you apply directly to the revenue office, payment is made after settlement or after construction milestones. We help you choose the pathway that aligns with your contract dates so the grant contributes to the funds you need at settlement.
State and Territory Differences
The table below gives a high level view of the current policy settings. Amounts are current to September 2025. Always confirm the latest rules with the relevant revenue office before you commit to a contract.
How FHOG interacts with other deposit support tools
FHOG is a cash grant. The federal Home Guarantee Scheme is a separate tool that reduces the deposit required by using a government guarantee. Under the First Home Guarantee and the Regional First Home Buyer Guarantee buyers can purchase with a 5% deposit and no LMI when they meet income and property price caps and lender credit criteria. Under the Family Home Guarantee eligible single parents can purchase with a 2% deposit and no LMI. You can use FHOG together with these schemes. FHOG becomes part of your funds to complete while the guarantee removes the need for a 20% cash deposit.
When we structure an application we first confirm eligibility for the relevant guarantee and then align the FHOG application method with your contract dates. That way the grant arrives in time to reduce what you need to contribute at settlement. For construction we target payment at the first progress draw where the rules allow it.
Using FHOG to form a workable deposit
Here is a simple sequence we follow to turn FHOG from a headline into usable funds at settlement.
- Confirm you meet first home buyer definitions and principal residence rules in your state or territory.
- Verify that your target property meets the local definition of a new home and fits within the current value cap if one applies.
- Determine your eligibility for a 5% or 2% federal guarantee and reserve a place with a participating lender where possible.
- Choose the FHOG application route. Apply through an approved agent or lender if you need the grant credited at settlement or at the first construction draw. Use direct application only when timing is not critical.
- Map contract dates. Align valuation, unconditional finance, and settlement so that grant approval and guarantee allocation are both in place before settlement day.
Timing traps to avoid
Counting on the grant to pay the initial exchange deposit. The grant usually cannot be used for the contract deposit at exchange. Plan separate funds for this stage.
Applying directly to the revenue office when you need funds at settlement. Direct payments are usually made after settlement or after construction milestones. Use an approved agent or lender route when timing matters.
Choosing a property that fails the new home definition. Most jurisdictions limit FHOG to new homes. Check off the plan and substantial renovation definitions before you sign.
Application and documentation
Revenue offices ask for proof that you are a first home buyer and that you will occupy the property. You should expect to provide identification documents, evidence of citizenship or permanent residency where required, and declarations about prior property ownership. For construction you will also need a building contract and proof of progress. We prepare the pack and lodge it through the approved channel so there are no avoidable delays.
How Empower Money Fits Into The Picture
Empower Money’s role is to reduce the time between intent and keys in hand. FHOG is one part of that. Another part is our Power Up Elite program which removes the deposit barrier and the LMI cost for eligible owner occupiers in metro areas. We use a two loan structure that funds up to 105% of the property price including the construction risk fee where applicable. The first mortgage runs for 30 years. The second mortgage runs for 10 years. An offset account is included and extra repayments are unlimited.
Power Up Elite is built for first home buyers and growing families who meet full doc requirements and can service a second mortgage. Minimum credit score is 650 with 750 preferred. Employment history should be at least 2 years and clean of recent defaults. Properties must be in approved metro postcodes. Loan amounts can be up to 2,000,000. Pre-approval can be issued in about 7 days once your documents are complete. Fees are transparent.
Why this matters for a deposit plan
FHOG turns into real dollars at settlement. The Home Guarantee Scheme turns a 20% deposit hurdle into 5% or 2% when you qualify. Power Up Elite goes further by funding up to 105% of the price so you can buy with no deposit and no LMI.
We can combine these tools. For example we can use FHOG to reduce what you owe on settlement day and Power Up Elite to remove the need for any cash deposit. We then build a plan to refinance into a single standard loan once your loan to value ratio reaches 80% or less.
Key benefits of Power Up Elite
- Zero deposit required for eligible owner occupiers in metro areas.
- Up to 105% loan to value ratio across two loans that are structured for manageable repayments.
- Offset account included and unlimited extra repayments to speed up principal reduction.
- Clear eligibility rules including minimum 650 credit score and full doc income verification.
- Pre approval in about 7 days once documents are complete.
Practical scenarios where FHOG really helps
FHOG rules do not change the fundamentals of a sound purchase. You still need a property that values at the agreed price, a budget that survives interest rate changes, and a clear path to an 80% loan to value ratio over time. What FHOG does provide is a real and immediate cash contribution toward the settlement funds on a qualifying new home. That contribution can be the difference between a purchase this year and a purchase next year. When used with a guarantee or with Power Up Elite it can remove the last practical barrier to ownership.
Frequently Asked Questions About FHOG
Which states still allow FHOG on established homes?
Most jurisdictions limit FHOG to new homes. The Northern Territory currently offers support on eligible established homes within HomeGrown program settings. The Australian Capital Territory does not pay a grant. It offers a transfer duty concession program instead.
When is the grant actually paid?
When you apply through an approved lender or agent the grant is usually paid at settlement for a purchase or at the first eligible construction draw for a build. When you apply directly to the revenue office payment is made after settlement or after construction milestones. The direct path rarely works if you need the funds for settlement.
Can we use FHOG together with the federal guarantees?
Yes. FHOG is a cash grant that can form part of your funds to complete. The guarantees reduce the deposit requirement and remove the need for LMI when you are eligible. We regularly use both in one plan.
Does FHOG have an income test?
States and territories generally do not apply an income test to FHOG. The federal guarantees do apply income caps and property price caps. Always check the current caps before you commit.
Can FHOG be paid into our loan to reduce what we owe at settlement?
Yes. When you apply through an approved lender or agent the grant is credited to your loan at settlement and reduces your cash to complete. We coordinate that with your lender.
