A first-time home buyer grant is a grant

Grant (money)

Grants are funds disbursed by one party , often a Government Department, Corporation, Foundation or Trust, to a recipient, often a nonprofit entity, educational institution, business or an individual. In order to receive a grant, some form of "Grant Writing" often referred to as either a proposal...

 specifically for/targeted at those buying their first home — perhaps a starter home

Starter home

A starter home or starter house is a house that is usually the first which a person or family can afford to purchase, often using a combination of savings and mortgage financing. In the real estate industry the term commonly denotes small one- or two-bedroom houses, often older homes but sometimes...

.
Like other grants, the first-time buyer does not hold an obligation to repay the grant.
In this respect, it differs from a loan

Loan

A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....

 and does not incur debt or interest.
Grants can be given out by foundations

Foundation (charity)

A foundation is a legal categorization of nonprofit organizations that will typically either donate funds and support to other organizations, or provide the source of funding for its own charitable purposes....

 and governments.
Grants to individuals can be either scholarships or donations.

First time home buyer grants are typically awarded based on a few criteria, primarily financial need and income qualifications.

Many states have initiated grant programs to help lower income residents with the purchase of their first home. The United States Department of Housing and Urban Development

United States Department of Housing and Urban Development

The United States Department of Housing and Urban Development, also known as HUD, is a Cabinet department in the Executive branch of the United States federal government...

 (HUD) also provides grants to first time home buyers. Funding for various state first time home buyer grants is nearly always available. In fiscal year 2006, only two states exhausted their budgets for first time home buyer grants.

Australia

A similar program was introduced in Australia from the 1 July 2000, where first time home buyers can receive a $7,000 once off payment to offset the cost of the GST

GST

-Computing:* Generalised suffix tree, a tree-like data structure* GNOME System Tools, part of the GNOME desktop environment* GNU Smalltalk, an implementation of the Smalltalk language* GST Computer Systems, a group of companies based in Cambridge, England...

. While the program is offered nationwide, the scheme is funded by the states and territories

States and territories of Australia

The Commonwealth of Australia is a union of six states and various territories. The Australian mainland is made up of five states and three territories, with the sixth state of Tasmania being made up of islands. In addition there are six island territories, known as external territories, and a...

 and subject to respective legislation

Australian Property Legislation

Australian property legislation refers to the different schemes of regulating property rights between each jurisdiction of the states and territories in Australia; combining legislation and receptive of common law. Despite differing statutes, the substantive effect in each jurisdiction is quite...

.

http://boost.treasury.qld.gov.au

First Home Owners Grant Boost

In October 2008, the Australian government announced a boost to the scheme to alleviate the Global Financial Crisis, in order to stimulate the housing industry and prop up the market. The stimulus consisted of an extra $14000 available to first home owners buying or building a new home, as well as an extra $7000 made available for established homes. The scheme continued from 14 October 2008 through to 30 September 2009.

On 1 October 2009 to the 31 December 2009, $7000 will be provided only to home owners buying new homes or building a new home on top of the regular $7000 once off payment. $3500 will be given to home owners buying established homes.

On January 2010, the scheme will default to $7000 for all first home owners.

Type	Scheme	Eligible dates	Benefit
Established homes	First Home Owner Grant	1 July 2000–present	$7000
New homes / construction	First Home Owner Grant	1 July 2000–present	$7000
Established homes	First Home Owner Boost	13 Oct 2008 – 30 Sept 2009	$7000
New homes / construction	First Home Owner Boost	13 Oct 2008 – 30 Sept 2009	$14000
Established homes	First Home Owner Boost	1 Oct 2009 – 31 Dec 2010	$7000
New homes / construction	First Home Owner Boost	1 Oct 2009 – 31 Dec 2010	$7000

During the budget announcement for 2011 to 2012, the QLD Government announced a further $10000 QLD Building Boost for new homes, townhouses and units for contracts entered into from the 1st of August 2011 to 31st of January 2012. The QLD Building Boost is eligible for first home buyers, owner occupiers and investors purchasing or building a new home. The total value of the new home must not exceed $600,000 to receive the grant. The aim by the QLD Government is to boost the construction industry that has seen lagging demand over the year.

Problems with first-time home buyer grants

Because a first time home buyer grant usually pushes up the amount that such a buyer can borrow from a financial institution by more than the value of the grant, in competitive housing markets where a majority of competing buyers will also have access to the grant, the end result is that lower-end houses increase in price also by more than the value of the grant, and first home buyers tend to accumulate more debt than if the grant had not been available.

External links

• First Home Owner Grant

• Qld Building Boost