So, one of the major perks to being in the Australian Defence Force (ADF) is all the housing benefits that you receive. If planned correctly you can use all of these to build wealth for you and your family whilst you serve – sounds great?! However, how do you do that? This is where majority of people come unstuck.
Failure to understand you Rental Allowance (RA), Defence Housing Australia (DHA), Defence Home Ownership Assistance Scheme (DHOAS), Home Purchase Assistance Scheme (HPAS) & Home Purchase or Sales Expense Allowance (HPSEA) can lead you to losing hundreds of thousands of dollars. Investing using your Entitlements can be a drawn-out process but if done correctly your future self will be giving you the high 5 of your life! So, what are all these entitlements and what do they do?
Firstly, members and their families’ housing needs are met by the specialized agency known as Defence Housing Australia (DHA).
ADF Property Guide for Defence Housing Australia (DHA)
Defence Housing Australia (DHA) is an agency that provides housing services to ADF property guide members and their families. Through DHA, members can access rental properties in designated locations. In some cases, ADF property guide members may have the opportunity to also go into Members Choice accommodation (MCA) and also if the member chooses to live on base, known as Living in Accommodation (LIA). DHA also administers this process with ADF members and is suited to Members without Dependents (MWOD).
The major goal of Defence Housing Australia (DHA) is to give ADF property guide members and their families cozy, safe, and well-maintained residences, ensuring that they have a stable and encouraging environment while serving the country.
Defence Housing Australia (DHA) a government agency tasked with providing housing options to ADF members, normally manages the property management services for all ADF housing needs. To meet the housing needs of ADF property guide members effectively and efficiently, DHA collaborates closely with the Department of Defence.
ADF members who are required to live off-base due to service requirements may also be eligible for a rental allowance. This allowance helps offset the cost of renting a property and can contribute towards the member’s housing expenses. This is different to members choice accommodation as you will need to compete with the market to secure a property.
Noting that ADF members do not have the option of DHA after they leave the ADF. The ADF property guide also provides its members with several benefits related to property purchasing. While this article provides a general guide, please note that specific benefits and policies may vary based on individual circumstances, rank, and service branch. It’s always recommended to consult Strike Property for the most accurate and up-to-date information.
Defence Home Ownership Assistance Scheme (DHOAS)
When it comes to buying a home, many people are unaware of the Defence Home Ownership Assistance Scheme (DHOAS). DHOAS is a program designed to help eligible Australian Defence Force (ADF) members, veterans, and their families with the purchase or construction of their own home.
The DHOAS scheme provides a subsidy on home loans and is a great way for ADF property guide members and veterans to enter the property market. But what exactly is DHOAS, and how can it help you secure your dream home? Let’s take a closer look.
DHOAS is a scheme that helps eligible ADF property guide members finance their home purchases. It provides a subsidy on home loans from three lenders, reducing your overall loan costs. These lenders are Defence Bank, Australian Military Bank and National Australia Bank. You will need to occupy the property for 12 months so you can forget about using it on an investment property initially. The scheme provides a subsidy on home loans, making it easier for eligible applicants to secure a mortgage and own their own home.
The subsidy is available on loans taken out with participating DHOAS lenders and is designed to reduce the amount of interest paid over the life of the loan. This means that eligible applicants may be able to pay off their home loan sooner, potentially saving thousands of dollars in interest payments.
Who is eligible for DHOAS?
To be eligible for DHOAS, you must have served in the ADF for a minimum of two years and meet certain other criteria. The scheme is available to:
- Current ADF members
- Former ADF members who have served a minimum of two years
- Reserves who meet the eligibility requirements
How does DHOAS work?
To apply for DHOAS, you need to obtain a loan from a participating DHOAS lender. Once you have secured a loan, you can then apply for the DHOAS subsidy.
The amount of the subsidy you receive will depend on a number of factors, including your years of service in the ADF property guide , your loan amount, and the current interest rate. The maximum subsidy available is 20 years, which can be 25 years if you conduct applicable war-like service.
To continue to receive the subsidy, you need to provide proof of your ongoing eligibility each year. This includes evidence of your ADF service and your continued ownership of the property.
Why choose DHOAS?
If you are eligible for DHOAS, it can be a great way to enter the property market and own your own home. The scheme provides a subsidy on home loans, potentially reducing the amount of interest you pay over the life of the loan.
DHOAS is a great program that can help eligible ADF members, veterans, and their families to purchase or build their own home. The subsidy on home loans can potentially save thousands of dollars in interest payments and make it easier to pay off your home loan sooner.
If you are a current or former ADF member, or the spouse or dependent of a deceased ADF property guide member, and are interested in buying a home, it is worth exploring the DHOAS scheme to see if you are eligible. With the help of a participating DHOAS lender, you could be well on your way to owning your own home.
There are a few notable facts with DHOAS. DHOAS is a recruitment and retention tool to encourage you to keep serving. Therefore, the ADF property guide have developed 3 tier levels – this is to keep increasing your subsidy amount in line with how long you are in the ADF.
DHOAS has a potential lump sum component is you have accrued the entitlement – this can be taken at Tier 1 regardless of if you are at Tier 2 or Tier 3. This cannot be used towards your deposit as it only is paid once your loan comes into effect.
You can also receive double DHOAS, if you take the loan out with another member, you are able to subsidies a higher loan amount.
Home Purchase Assistance Scheme
The Home Purchase Assistance Scheme (HPAS) is a one-time payment aimed at helping members of the Permanent Forces or Reserve members on continuous full-time service (CFTS) to purchase their first home. Eligibility requires buying a home in their current or next housing benefit location, purchasing the home after receiving a posting order, and occupying the home for at least 12 months after signing the contract. The amount provided is $16,949 (before tax), It is also taxable, so don’t get caught out, and it can be used to buy an existing home or build one.
If the home is under construction, it must be occupied within a specific time frame depending on the circumstances. If there are unavoidable delays in occupying the home, an extension of up to 12 months may be granted. The HPAS payment may need to be repaid if the purchase does not go through, except in cases where Service reasons prevent the purchase, in which reasonable costs can be claimed.
To apply for the HPAS, applicants need to complete and submit the Application for Home Purchase Assistance Scheme or Home Purchase or Sale Expenses Allowance (AC970) form, along with necessary supporting documents. The approval process can take 16 weeks, and if approved, the payment will be received in the next pay.
If you are purchasing with a dependent, you will receive the full entitlement however if you purchase with someone who isn’t a dependent then you will only receive half of the entitlement.
Additionally, if the home is sold in the future, applicants may be eligible to claim costs using the Home Purchase or Sale Expenses Allowance (HPSEA).
Home Purchase or Sale Expenses Allowance (HPSEA)
The last of the ‘Big 3’ ADF Housing Entitlements is Home Purchase or Sales Expense Allowance (HPSEA). The ADF property guide offers assistance to its members who are selling or buying a home through the Home Purchase or Sale Expenses Allowance (HPSEA). This allowance reimburses some costs related to selling a home, and if you’re buying a home other than your first, you can claim certain costs using HPSEA.
HPSEA works on a sell-buy-sell cycle, which starts once you get approval for the Home Purchase Assistance Scheme (HPAS) on your first home. Once you receive your next posting order, you become eligible to claim HPSEA if you sell that home. It’s important to keep the claim cycle open by meeting the eligibility criteria for both selling and buying a home, including time limits.
If you break the ‘sale’ cycle, you can re-enter it in the future by selling the home you’re living in at the time you get your posting order to a new location. Eligibility for HPSEA while selling a home depends on various factors, such as living in the home, having related costs to your new posting, previously using HPAS or HPSEA for buying a home, and selling the home within 2 years of getting your posting order.
There are exceptions to the time limits for selling a home if you’re posted to specific locations or overseas. In such cases, contact the ADF Delegations team to clarify your eligibility.
Eligibility for HPSEA when buying a home includes living in the home, having your last benefit for selling a home, having at least 12 months left in your primary service location from the date of the contract, signing the purchase contract within 4 years of your posting order, and purchasing a home in your expected housing benefit location for at least 12 months after signing the contract.
The costs that can be claimed for selling a home include solicitor or broker fees, agent or auctioneer fees, and government duties or fees. However, costs like staging, pre-sale inspections, and home maintenance are not eligible for reimbursement. For buying a home, eligible costs include solicitor or conveyancer fees, broker fees, and government duties or fees, but costs relating to home ownership, like surveys, council rates, utilities, and home improvements, are not covered.
To apply for HPSEA, members need to use an Application for Home Purchase Assistance Scheme or Home Purchase or Sale Expenses Allowance (AC970) form, which can be downloaded from the Defence Protected Network (DPN) webforms portal or applied through ServiceConnect. Members must submit supporting documents and send the completed form to their Commanding Officer (CO), who will process the application. The outcome is usually advised within 6 to 8 weeks, and Defence pays the money via PMKeyS Self Service (PSS) through the member’s salary.
It’s important to note that eligibility criteria and specific benefits may vary, and some benefits may be subject to certain conditions, time frames, or financial limitations. ADF members should consult with Strike Property on the relevant ADF policies, guidelines, and authorities for comprehensive information regarding property purchasing benefits.