The 11 things you need to know to secure the $35,240 saving under the October NSW first-home owners' grant scheme

By Property Observer
Tuesday, 12 June 2012

1. What is the First Home Owner Grant (New Home) scheme?

The First Home Owner Grant (New Home) Scheme provides a grant of $15,000 to help eligible first home buyers to purchase or build a new home.

It will replace the current $7000 First Home Owner Grant from 1 October 2012.

2. When does it apply?

The grant of $15,000 applies to eligible transactions entered into on or after 1 October 2012 and before 1 January 2014.

The grant will then be reduced to $10,000 from 1 January 2014 with no end date set.

3. What is an eligible transaction?

An eligible transaction is:

(a) a contract made on or after 1 October 2012 for the purchase of a new home in New South Wales, or

(b) a comprehensive home building contract made on or after 1 October 2012 by the owner of the land in New South Wales or a person who will on completion of the contract be the owner of land in New South Wales, to have a home built on it, or the building of a home in New South Wales by the owner builder if the building work commences on or after 1 October 2012.

4. What is a new home?

A new home is a home that has not been previously occupied or sold as a place of residence, and includes a home that is a substantially renovated home and a home built to replace demolished premises.

5. What is a substantially renovated home?

A substantially renovated home is a renovated home:

(a) that is new residential premises within the meaning of section 40-75(1)(b) of the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth, and

(b) that, as renovated, has not been previously occupied or sold as a place of residence.

Under that legislation, `substantial renovations’ of a building are defined as renovations in which all, or substantially all, of a building is removed or replaced. The renovations may, but need not, involve the removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases.

6. What is a home built to replace demolished premises?

A home is a home built to replace demolished premises if:

(a) the home is a new residential premises within the meaning of section 40-75(1)(b) of the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth, and

(b) the home, as built to replace the demolished premises, has not been previously occupied or sold as a place of residence, and

(c) the owner of the home did not occupy the demolished premises as a place of residence before they were demolished.

7. Does the price of the home need to be under a limit to receive the First Home Owner Grant (New 

Home)?

Yes, effective from 1 October 2012 the First Home Owner Grant (New Home) Scheme is capped to $650,000. The grant will only be available for properties with a total value not exceeding that amount.

8. How is the Total Value of the home calculated?

For a contract of sale of a home, the total value is based on the greater of the following:

• the consideration for the eligible transaction
• the unencumbered value, as at the commencement date of the eligible transaction.

For a comprehensive home building contract, the total value is calculated by adding together:

• the consideration for the eligible transaction, and
• the value, at the commencement date, of the relevant interest of the land on which the home is to be built.

For a building of a home by an owner builder, the total value is calculated by adding together:

• the unencumbered value of the home, at the date the transaction is completed and the value, at the date the transaction is completed, of the relevant interest in the land on which the home is built.
• The value of the relevant interest in the land on which the home is to be built is the greater of the following:

1. the consideration paid or payable for the interest
2. the unencumbered value of the interest.

9. From October 2012 do I get a grant if I buy an existing home?

No, from 1 October 2012, the First Home Owner Grant will only be payable on the purchase of new homes.

The $7000 First Home owner Grant is still available for purchases of existing homes entered into before 1 October 2012.

10. Does the First Home Owner Grant ( New Home) apply to replacement contracts entered into on or after 1 October 2012?

A contract for the sale or transfer is not eligible if:

(a) it replaces an agreement made before 1 October 2012, and

(b) the replaced contract is for the sale or transfer of substantially the same property.

11. Can I get the First Home Owner Grant and the $5000 New Home Grant?

If you receive the First Home Owner Grant, you cannot receive the $5 000 New Home Grant for the same property.

Source: NSW Office of State Revenue

State by State Wrap Up of First Home Buyer Concessions

Victorian government offers bigger carrot to first-home buyers: Government housing incentives in 2013

By Larry Schlesinger 

Thursday, 10 January 2013

www.propertyobserver.com.au

Greater financial incentives are being offered to first-home buyers in Victoria following the raising of the stamp duty discount for homes priced under $600,000 from 20% to 30%.

The higher discount kicked in on January 1, 2013, and applies to both existing homes and new homes, delivering first-home buyers additional savings starting from $600 to a maximum of just over $3,000 on a house price at $600,000.

Maximum stamp duty savings are now over $9,000. Combined with the existing first-home owners' grant of $7,000 there is nearly $16,000 in savings for those first-home buyers who are willing to venture into the property market in 2013.

The stamp duty discount will rise to 40% on January 1, 2014, and to 50% on September 1, 2014.

To qualify for the stamp duty discount, first-home buyers must also qualify for the $7,000 first-home owners’ grant.

All added up it means Victorian first-home buyers purchasing an existing home receive the highest amount of financial support from their state government.

South Australia, NSW and Queensland all offer higher total incentives and savings, but these are restricted to buying or building a new home.

This is what the other states are offering first-home buyers in 2013:

NSW

A first-home buyer who purchases a $550,000 new home will get $35,240 in assistance.

This includes a $15,000 grant for first-home owners who purchase or build a new home valued at up to $650,000. The grant is available until December 31, 2013, reducing to $10,000 from January 1, 2014.

Non-first-home buyers who buy a new home are eligible for $5,000 whether the new home is off the plan or newly built with a value up to $650,000, The $5,000 grant is also available to buyers of vacant land that is intended to be the site of a new home valued up to $450,000.

First-home owners are also eligible for a maximum stamp duty saving of $20,240 for homes up to a value of $550,000, with duty concessions for new homes valued between $550,000 and $650,000. The transfer duty exemption cap on vacant land is $350,000, with duty concessions for vacant land valued between $350,000 and $450,000.

Queensland

A $15,000 first-home owner construction grant (FHOCG) is available. The FHOCG applies to new property bought or built at a value under $750,000.

First-home buyers also pay no duty on purchases up to $500,000, with a phasing-out rebate applicable for values up to $600,000.

For non-first-home buyers, the Queensland government offers a concessional stamp duty rate of 1% up to a value of $350,000, with stamp duty charged at normal rates for the remaining value of the home purchase. The buyer must occupy the home for a period of 12 months – an applicant may lose the concession if he sells or leases part or all of the home before moving in or within a year of moving in.

South Australia

South Australian first-home buyers have the chance to secure $23,500 from the state government, provided they build a new home.

The $23,500 handout comprises a doubled first-home owner grant of $15,000 for contracts entered into on or after October 15 and up to a value of $575,000, plus a further $8,500 housing construction grant (HCG). The housing construction grant replaces the $8,000 first-home bonus grant.

The HCG is available to all builders of new homes for properties valued up to $400,000, phasing out for properties valued up to $450,000 where contracts are entered into between October 15, 2012, and June 30, 2013, inclusive.

Concessions could rise to $39,830 if first-tome buyers buy an apartment off the plan in the Adelaide CBD under $400,000, where a stamp duty concession of $16,330 applies.

This part of a new stamp duty concession scheme available on the transfer of a new CBD apartment or a "substantially refurbished apartment" for a contract entered into from May 31, 2012, to June 30, 2014, capped at stamp duty payable on a $500,000 apartment of $21,330.

An example where a $39,830 saving would be available to a first-home buyer is Aria on Gouger Street being developed by Brock Urban Projects, where two-bedroom apartments are priced from $335,750.

South Australian first-home buyers of established homes will continue to be entitled to a $7,000 first-home owners’ grant until amending legislation comes into force.

From the date the amending legislation comes into force until June 30, 2014, purchasers of established homes will be entitled to a reduced $5,000 grant. From July 1, 2014, no grant will be available to purchasers of established homes. 

WA

A $7,000 first-home owner grant remains in place for a newly constructed or established home. It does not apply to vacant land purchased to build a new home. The total value of the home must not exceed $750,000 if the property is located south of the 26^th parallel of South Latitude, or $1 million if located north of the 26^th parallel of South Latitude. First-home buyers eligible for the $7,000 grant pay no stamp duty on homes valued up to $500,000 and up to $300,000 for vacant land.

ACT

A $7,000 first-home owner grant remains in place for both existing and new homes where the price of the property or construction of the home does not exceed $750,000.

Tasmania

A $7,000 first-home owner grant remains in place for both existing and new homes, with no cap on the value.

Tasmanian first-home buyers buying or  building a new home (including off-the-plan) are eligible for an additional $8,000 under the First Home Builder Boost Scheme, which applies from January 1 2013 to June 30 2014 if the qualify for the first-home owner grant.

Northern Territory

A $7,000 first-home owner grant remains in place for both existing and new homes where the price of the property or construction of the home does not exceed $750,000.

The NT government also offers first-home owners stamp duty concession of up to $26,730 (the duty owed on the first $540,000 value of a property).