First Home Buyers have last chance for Concession before Christmas!
SW first homebuyers are to face tighter Stamp Duty Concessions in an effort by the Government to stimulate new building activity. From January 1, 2012 significant changes will be made to the current exemption and concessions offered by the NSW Government. The current scheme will be replaced by the First Home – New Home Scheme.
What does this mean on the Purchasers?
Purchasers between now and January 2012, who are first time home buyers must act quickly to make the most of existing benefits before they are abolished.
First time home buyers currently pay no stamp duty on all properties under $500,000, and receive a discount for properties valued up to $600,000. First home benefits of up to $24,990 have been available, including the $7,000 First Home Owner Grant and a duty exemption of up to $17,990 under the First Home Plus Scheme.
Please note that any contracts entered into before 31 December 2011 will still be dealt with under the existing scheme.
However, the new scheme means that from 1 January 2012, the stamp duty concessions will apply only to newly constructed homes – including those built off the plan.
The main changes are as follows:-
The agreement or transfer must be for the acquisition of a first home which is a new home or a vacant block of residential land intended to be the site of a first home. This includes the acquisition of:
(a) a new home (that is a home that has not been previously occupied or sold as a placeof residence);
(b) a substantially renovated home;
(c) a vacant block of residential land (that is an agreement for the sale or transfer of vacant land that is intended to be used as the site of a first home).
Under the legislation, substantial renovation of a building is defined as a renovation in which all, or substantially all, of a building is removed or replaced. The renovation may, but need not, involve the removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases.
The entitlement is limited to an eligible purchaser. An ‘eligible purchaser’ is a natural person (i.e. not a company or trust) at least 18 years of age who has not, and whose spouse/de facto has not:
(a) at any time owned (either solely or with someone else) residential property in Australia other than property owned solely as trustee or executor;
(b) at any time been the holder (either solely or with someone else) of a leasehold interest granted by the Commonwealth in residential property in the Australian Capital Territory;
(c) previously received an exemption or concession under First Home Plus.
- The residency requirements remain the same (must be occupied by at least one of the purchasers for a minimum of 6 months within the first 12 months of ownership)
- Applicants may still be eligible for the First Home Grant even if they do not qualify for the stamp duty exemption
- The exemption does not apply if the applicant is purchasing an old home to demolish and rebuild or renovate, it is only applicable for vacant land purchases OR if the home they wish to purchase has already been substantially renovated and never lived in.
Price eligibility is limited to:
- $600,000 for a new home or off the plan purchase
- $450,000 for a vacant land purchase
Where an eligible transfer is approved, no duty is payable where the dutiable value of the property is not more than –
(i) $500,000 for a new home, or
(ii) $300,000 for land being purchased to build a new home.
Where the price exceeds the amounts mentioned in (i) and (ii) above, a reduced duty is payable between that amount and the ceiling amount permitted.
It is still permissible under the new legislation to have an equity partner involved the transaction.
The following link has a full explanation of the points covered above together with Q & A for those more frequently asked questions: http://www.osr.nsw.gov.au/benefits/first_home/faqs/new_home/
If you are a first time home buyer and need a property settled in a timely manner, contact Christine Martin our Property and Commercial Department Manager on 07 5506 8245 or email firstname.lastname@example.org – WE OFFER DISCOUNTS ON OUR FEES TO FIRST HOME BUYERS!