First Home Owner Grant Claims and Eligibility

sydneybargainer on 21/12/2019 - 16:29

Hi Guys,
I hope someone can help with this.

Scenario is:
Like many of us I have been saving for first home for last 5 years, and wanted to 10k grant as part of 20% deposit. My broker suggested that bank will apply FHOG on your behalf and claim it for you as a part of deposit.

I purchased land & I got construction contract. (2 separate contract with more than 12 months a part) combined contract price value under 750k.
Land loan - approved no issues.
When I applied for construction loan (with same bank) they did land valuation and it valued $50k higher than actual land contract price. so total project cost went above 750k threshold value, so bank said you are not eligible for FHOG so we can not apply. So now all of sudden my deposit is 10k short!

There are 2 issues:
1. I am 10k short in deposit and bank refuse to use the increased value of land as equity. Not sure if this is normal.
2. FHOG - I spoke revenue department - They said I can apply for FHOG once i moved in to property… Has any one done this before? how difficult it is? what document do they ask? (they said i will need another land valuation, if land value + construction contract is below 750k then I can get 10k grant). State revenue said - "usually bank value the land higher and than actual price" dont know why?

Has anyone come across this situation?

Appreciate your inputs.

Financial

Comments

  • garetz on 21/12/2019 - 17:19
    +3

    It doesnt matter what they value the land at, all that matters is what you actually paid for it, i would create a complaint, and go through the complaints process.

    land valuation is subjective, what you actually paid is concrete evidence of value.

    • sydneybargainer on 21/12/2019 - 22:09

      already submitted the complaint to bank.

  • ra3m3 on 21/12/2019 - 18:17
    1. FHOG - I spoke revenue department - They said I can apply for FHOG once i moved in to property… Has any one done this before? how difficult it is? what document do they ask? (they said i will need another land valuation, if land value + construction contract is below 750k then I can get 10k grant). State revenue said - "usually bank value the land higher and than actual price" dont know why?

    I am not an expert but here are my 2 cents. I believe you can apply for the 10k grant through the revenue department as they typically check the ledger to understand how much you spent on the house. In your case - paid land value + paid construction value which is, going by your words, within the FHOG limit.

    1. I am 10k short in deposit and bank refuse to use the increased value of land as equity. Not sure if this is normal.

    Not normal! The bank will always want to keep the loan-to-value ratio (LVR) low and they are just avoiding your request. Be persistent! If your borrowing capacity is high enough, they cannot deny. They can only ask for another valuation and hope for it to come lower.

  • dasher86 on 21/12/2019 - 20:53

    If you're not already locked in I would start asking other providers.

    • sydneybargainer on 21/12/2019 - 22:08

      I have considered that. Not locked in with bank but changing bank is not the best option because complication, no guarantee if another will do it or not… banks do not do upfront valuation they will do valuation once I apply for loan (2 of the major banks use same valuation company!!), will take easily another 4 weeks while my builder is ready to start building. Any delay means I will continue pay rent longer.
      gosh. cant express what i feel.

  • avoidfullprice on 22/12/2019 - 00:13

    Homeowner here and got the NSW FHOG. Counting the FHOG as your 20% is at discretion of your bank.

    FHOG is based on purchase price, not the value price. When I applied I have to supply settlement evidence through my lawyer.

    A condition of the FHOG is you live on it. So if it is under construction I don't think you get the FHOG until you start living in it.

    • Neoika on 22/12/2019 - 07:20

      Not correct, $10k can be used to pay for the first progess payment(slab) if you have homeloan with a bank. The bank orders $10k and pays it to your builder on your behalf.

      If someone can afford to buy it without homeloan, he has to wait till the construction finishes.

    • sydneybargainer on 22/12/2019 - 14:37

      FHOG is on purchase price ONLY if land contract date and construction contract date are with in 12 months period only, mine is more than 12 months a part. Purchase price is only valid for 12 months then they will ask for land valuation.

    • avoidfullprice on 23/12/2019 - 10:36

      That sucks man. Sorry for giving incorrect info and can't be of help. All the best finding a different lender!

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