Know your alphabet (of first home buyer entitlements)

Know your alphabet (of first home buyer entitlements)

Know your alphabet (of first home buyer entitlements)

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01 Aug 17

As a member of the Australian Defence Force (ADF) there are some great entitlements to help you along the way to buy property for investment.

Knowing what is on offer can put you in a great position financially. You could find yourself with more cash flow to either prop up your weekly budget or contribute extra payments on your mortgage or mortgages.

Get ready for an onslaught of acronyms. We promise it will be worth your while!

On the go? Here’s 30 seconds of key take outs:

  • Knowledge truly is power over your finances when it comes to entitlements available to you as a member of Defence.
  • Any entitlement you are eligible for will get you closer to your lifestyle goals faster, so make sure you don’t miss out!
  • This article is to be used as a guide only. Eligibility criteria and entitlements available will change over time. You’ll need to go to the original sources provided in this article to stay up to date.

Keep reading >>

You may be eligible for property purchasing related benefits through DHOAS, HPAS, FHOG NSW and FHOG VIC. Have we lost you yet? Hang in there and we’ll take you through what each of these acronyms mean in terms of money in your pocket or equity in your property.

What the ... is DHOAS?  

DHOAS stands for the Defence Home Ownership Assistance Scheme. This scheme supports and encourages Defence members – past and current – to own a home by subsidising your monthly loan repayments. Imagine that. The DHOAS is helping pay your monthly mortgage payments. Gold!

The longer you’ve been serving with the ADF, the higher the maximum monthly subsidy on offer. There are a number of eligibility criteria you’ll need to meet such as having served with the ADF within the last two years of applying for the subsidy. You also need to have completed at least four years of permanent service or 8 years of Reserve service; and have accrued a service credit.

Once you’ve jumped the right hoops and applied for, and been granted a Subsidy Certificate, you then head to your home loan provider and take out a DHOAS home loan. There are some restrictions on who can finance your property. At the moment, you can lend through Defence Bank, Australian Military Bank and NAB.

You’ll need to meet a bunch of Scheme conditions to receive the monthly subsidy payments.

In short, if you’ve served with the ADF for a number of years and within the last two years, and you’re planning to buy your average residential property on a straightforward title it’s likely you’ll meet the requirements and receive the monthly subsidies.

To get an idea of the monthly subsidy you might be eligible to receive, plug in some numbers to the DHOAS Subsidy Amount Calculator.

If you are seriously looking into this option, please go straight to the source of up to date information on the website Department of Veterans’ Affairs > DHOAS.

What the ... is HPAS?  

HPAS stands for the Home Purchase Assistance Scheme. How’s this for a benefit? As a serving member of Defence you may be eligible to apply for a one off payment of *$16, 949 when you buy a home or house and land package.

There are a number of conditions. The property needs to be in your posting location (or where your dependants are living) and you, or your dependants, must live in it for at least 12 months. You can’t just buy land with it. It is only for purchasing a property that you can move into.

It also works a bit like first home owner’s grants in that you can’t have already received a previous benefit.

*special note: The payment amount was correct at the time of the article. 

You will need to check with your accountant or financial adviser on how this payment will impact your taxable income. At the time of writing this article, the $16, 949 will be included in your taxable income with tax deducted when you receive the one-off payment. Go to Defence > Pay and Conditions to find out more.

Be aware that you may need to pay the $16, 949 back if the purchase falls through for some reason or if you, or your dependants don’t live in the property.

If you are seriously looking into this option, please go straight to the source of up to date information on the website Department of Defence > Pay and Conditions > ADF Manual > Chapter 7 > Part 3.

What the ... is the FHOG - NSW?  

FHOG stands for the First Home Owners Grant for New South Wales. You may be entitled to a FHOG if you’re planning to buy a newly built, or about to be built, residential property in New South Wales. For transactions made after 1 January 2016, that is $10,000 in your pocket!

And there’s more. To be eligible for the grant, you would need to live in the property for at least six months.

Defence Force members looking to buy their first home often struggle to meet the residency criteria for the grant, due to deployments to other states or overseas.

The New South Wales government recognise that due to deployments, this is tricky criteria for Defence personnel to meet, so Defence members are offered a residence exemption.

So what the ... is a residence exemption? The residence exemption means you can apply for the FHOG without having to live in the property. Property investment anyone? How good is that?!

And there’s even more. You may be entitled to a stamp duty exemption too. Find out more by visiting the Revenue NSW website. You’ll find more information under the Grants page and the First Home – New Home Scheme pages.

*Special note: grants, the residency exemption and stamp duty exemption are current at the time of the article. 

What the ... is the FHOG - VIC?  

FHOG stands for the First Home Owners Grant for Victoria. You may be entitled to a FHOG if you’re on the Victorian electoral roll and planning to buy a newly built, or about to be built, residential property in Victoria. If you’re buying or building a new home in regional Victoria you may be eligible for a grant of $20,000! If the property isn’t in regional Victoria, it’s a $10,000 grant.

Due to the Defence lifestyle and deployments to other states or overseas, the Victorian government also offers a residency exemption on their 12 month residency criteria.

Find out more by visiting the State Revenue of Victoria website. You’ll find more information under the First Home Owner pages.

*Special note: grants, the residency exemption and stamp duty exemption are current at the time of the article. 

Stay up to date with your Defence pay and condition benefits by keeping an eye on the Department of Defence website on the Pay and Conditions pages.

What could you possibly be waiting for? As a Defence Force member, your path to the lifestyle you want to live, has already been cleared for you. 

What the … is HPSEA?

HPSEA stands for Home Purchase or Sale Expenses Allowance. This Department of Defence allowance is for reimbursement of reasonable costs, as a Defence member, when you sell a home that you or your dependants had been living in, because you’ve been posted to a new location.

You may be eligible for a HPSEA where:

  • You buy a home in your new posting location within four years from starting your deployment there; and,
  • You sell your previous home (in your previous posting location) within two years from starting your new deployment.

If you’ve used the Home Purchase Assistance Scheme (HPAS) to buy your home, you won’t be eligible to claim the HPSEA.

There is a bunch more information available from the Department of Defence > Pay and Conditions > ADF Manual > Chapter 7 Part 3 Division 2.

What could you possibly be waiting for? As a Defence Force member, your path to the lifestyle you want to live, has already been cleared for you.

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