Are You Looking Into Building Or Buying A New Home?
Is this your first home? If your answer is yes! Great!
That’s a huge step in life and a million things must be running through your mind. Things like…what are the best ways I can save? Will I get the best possible deals with this purchase? What colour should I make my walls?
Whatever it is…you’d be happy to know that the ‘First home owner grant (new homes) scheme’ or the ‘First home – new home scheme’ may apply to you, which will greatly assist you in saving on your purchase.
Both schemes however, only apply to ‘new home’ purchases. So what is considered as a ‘new home’, you may ask.
A new home can be defined as a home that has not been sold as a place of residence or a home that has not been previously occupied. A new home can include a home built to replace demolished premises or a home that has been substantially renovated. With that said, a home that has been occupied will not be considered as a new home and where the home is being purchased, it must be the first sale of that home.
The First homeowner’s grant scheme was introduced on the 1st of July 2000. The scheme was introduced to counterbalance the effect of GST on home ownership and to assist eligible first homeowners in purchasing their new home or building their home.
It is a national scheme funded by the states and territories, governed under their own legislation. Through the scheme, a one-off grant will be payable to first new homeowners who satisfy all the eligibility criteria. For eligible transactions on or after 1 January 2016, the grant amount is $10,000.
So let’s see whether or not you’re eligible…
To be eligible for the grant, you must be able to tick off all of the following boxes:
o The contract date must be on or after 1 January 2016
o The home is a brand new home
o You are over 18
o You or your spouse (including de facto spouse) have never held a relevant interest in any residential property in Australia prior to 1 July 2000
o However, you may be eligible if you or your spouse, including de facto spouse, have only had a relevant interest in any residential property in Australia on or after 1 July 2000, and you have not resided in that property for a continuous period of at least 6 months
o The value of the property must not exceed the First Home Owner Grant Cap of $750,000
o You have not received a first home owners grant in any State or Territory, unless subsequently repaid
o You need to live in the home for a continuous period of at least 6 months
o At least one applicant is a permanent resident or Australian citizen
o Each applicant must be a natural person and not a company or trust
If you have successfully checked off all the above boxes then you are eligible for the first homeowner’s grant. If you cannot meet all of the eligibility requirements, you will not be eligible to receive the grant.
NOTE: If you receive the grant and fail to meet any of the eligible requirements (for instance, you decide not to live in the home for a continuous period of at least 6 months), you will need to pay back the grant, and failing to do so can result in prosecution, and penalties up to $11,000.
NOTE: If you are part of the Australian Defence Force and all applicants are on the New South Wales electoral roll, you may be eligible for an exemption from the 6-month residence requirement,
The First home – New home scheme, on the other hand, is a NSW Government initiative, which commenced from the 1st of January 2012.
The scheme has provided eligible purchasers with exemptions from Stamp Duty on new homes valued up to $550,000. Eligible purchasers could therefore avoid paying a couple of thousand dollars that is generally payable on stamp duty fees. For instance, for a property valued at $650,000, you could avoid paying $24,760 on stamp duty fees.
The First home – New home scheme also provides concessions for new homes valued between $550,000 and $650,000.
Eligible purchasers buying a vacant block of residential land, to build their home, can also avoid paying stamp duty on vacant land valued up to $350,000. Again, this saves eligible purchasers a couple of thousand dollars, payable to stamp duty fees.
Eligible purchasers can also receive concessions for vacant land valued between $350,000 and $450,000.
To be eligible for the duty concession or exemption, you must be able to tick off all of the following boxes:
o at least one buyer must be an Australian citizen or permanent resident
o the agreement must be for the purchase of the whole property
o you must be a natural person (not a company or trust)
o you must be over 18
o you or your partner have not previously owned residential property in any form in any State or Territory of Australia
o at least one purchaser must occupy the home within 12 months and needs to live in the home for a continuous period of at least 6months.
HOWEVER, if your partner has previously owned a home or received a benefit from the Office of State Revenue, under the First Home -New Home Scheme, you will not be eligible to receive a concession or exemption.
If you have recently purchased a new home and love the idea of saving but have trouble understanding whether these grants apply to you, fear not! Contact us today and we will explain these schemes to you in detail and determine whether you are eligible.