First Home Owners Grant & Stamp Duty Concessions
First Home Owners Grant Increased to $21000, $14000, Total NSW benefit $24,000, 14 October 2008
The Prime Minister said on 14 October that the first home buyers grant will double to $14,000 for those buying an established home and triple to $21,000
for those buying a newly built home. The newly increased $21,000 Grant for First Home Buyers in Australia will be available immediately and for the rest
of the 2008-09 financial year, it was reported today. The State Revenue Offices, the government departments which manage the scheme in each state and territory,
are now able to provide detailed information on eligibility and starting dates. NSW OSR has provided the Fact Sheet here.
The increase means that for a typical first home buyer in Sydney or anywhere in New South Wales (price up to $400,000), the grant will take care of all major costs
including mortgage insurance when purchased with a No Deposit or 3% deposit home loan, as New South Wales (and some other states) exempts eligible first
home purchasers from stamp duty up to a maximum price level
(nil stamp duty upto $500,000 in Sydney). To complete your purchase without a contribution for deposit or
mortgage insurance, you need to apply for your Grant with us and we will place it with
your lender so that they have the first home owner grant funds available at settlement.
However, if you wanted to save your deposit, read up the news on the new scheme First Home Saver Accounts,
which started on 1 October 2008 and helps save for your first home deposit with Government contribution & low taxes (however you need to save it over 4 years).
First Home Owners Grant
The First Home Owner Grant (FHOG) scheme was introduced on 1st July 2000 by the Commonwealth Government to offset the effect of the GST on home ownership.
It is a national scheme funded by the states and territories and administered under their own legislation.
Under the scheme, a one-off grant of up to $7000 is payable to first home buyers who satisfy all the eligibility criteria.
As a basic rule, you are eligible if you are an Australian citizen or permanent resident, buying or building your first home in Australia, with
the intention of occupying it as your principal place of residence within 12 months of the settlement. It is important to note that if you are
buying the property in conjunction with others, they must also meet the same criteria for the grant to be applicable.
Eligible first home buyers can receive the grant regardless of their income, the area in which they are planning to buy or build, or the
value of their first home. The grant is not means tested and no tax is payable on it.
You can make your application for the grant at the same time as your home loan application with us. As agents for FHOG Scheme, lenders are able to process your application and have it ready for payment to you on settlement.
Basic Rules
You need to be
- A couple or individual buying or building your first home
- An Australian citizen or permanent resident
- Entering into a binding contract to buy or build a new home after 1 July 2000 (or owner-builders who started building a home after 1 July 2000).
All permanent homes qualify for the grant. You remain eligible even if you've previously purchased land, just as long as you haven't built a home on it.
Keep in mind
You cannot benefit from the grant if you are
- Purchasing a holiday house, investment property or any property which is not your "principal place of residence"
- A trust or company
Deadlines
You must apply for the grant within 12 months of settlement on an established home or within 12 months of your home being built.
At least one applicant must occupy the home as their principal place of residence for a continuous period of 6 months commencing within 12 months of settlement or construction of the home.
To find out more on The First Home Owners Scheme, you can also visit the Government’s website
First Home to check eligibility lists for each state.
How do I apply?
When completing your home loan application, your HOME LOAN OFFICE ( thlo ) certified mortgage consultant will test your eligibility. We will then guide you through the application process for the First Home Owner Grant.
You will be asked to sign the First Home Owner Grant application form at the time of loan application.
What are the benefits of applying through The HOME LOAN OFFICE?
Successful First Home Owner Grant applications lodged by us through our lenders will be available to you on the day of settlement (if you have purchased an established property).
This grant can be used to contribute to the cost of the property and/or fees associated with the property purchase, or can be paid into a nominated bank account. It's your choice!
When will I receive the payment?
- For the purchase of an existing dwelling, payment will be made at settlement.
- For a building contract, payment will be made on the first progress payment.
- For an owner-builder, payment will be made on certificate of occupancy / completion.
Who manages the first home owners grant?
The states and territories are responsible for administering the grant. Forms are available from State or Territory Revenue Offices:
- New South Wales
- Victoria
- Queensland
- Western Australia 1300 363 211
- South Australia (08) 8226 3750
- Tasmania (03) 6233 3465
- ACT (02) 6207 0029
The application forms require Adobe Acrobat Reader. If you need to, you can download it from the Adobe Web site.
First Home Stamp Duty Concessions
Stamp Duty is payable on the transfer of land, in other words, on any real estate purchase in Australia. However, every state and territory has a different treatment of first home buyers.
For up to date information on stamp duty and how it applies to you, please see the Stamp Duty page of our web site.
FACT SHEETS
FACT SHEET - First Home Owners Grant & Duty Concessions
FACT SHEET - First Home Saver Accounts
FACT SHEET - Deposit Bonds
FACT SHEET - Loan Establishment Costs
FACT SHEET - Frequently Asked Questions
Please Click INQUIRY or Call Us on 1800 456 284 to Request a Free Appointment with A Certified Consultant.
FIRST HOME BUYER NEWS
Coming Soon! Sydney Home Buyer Show
Saturday 25 October – 10am to 5pm
Sunday 26 October - 10am to 5pm
Source: www.homebuyershow.com.au
Sydney still remains the country’s most expensive housing market and there is no doubt that low levels of affordability are still making it challenging for home buyers across the state.
However, recent house price data does point to a slow and steady recovery in the housing market with building approvals rising and the state’s economy starting to show positive signs of recovery.
With housing affordability at an all time low in NSW, now more than ever home buyers and investors of all levels need to ensure they do their research, understand the market and have all the right information they need to make informed buying decisions. The Home Buyer Show is the only event in NSW dedicated to helping property buyers make informed buying decisions and astute buyers can still pick up good value buys in Sydney by choosing suburbs that have excellent credentials without the blue-chip price tags.
The REINSW December 2007 quarter figures showcase a number of strong performers and found 31 local government areas where median prices grew by more than 5 per cent. Many of these are suburbs are within a 10 kilometre radius of the CBD and had good access to public transport infrastructure. The stand-outs for houses include Ryde, where house prices grew 6.7 per cent to a median of $366,000 and Hawkesbury, where prices rose 7.7 per cent to $280,000.
First home buyers attending the event can establish whether they are eligible for the benefits under the First Home Owner Grant Scheme offering eligible NSW based first home buyers a $7,000 grant to assist with their first purchase or construction. The NSW First Home Plus Scheme provides generous exemptions or concessions on transfer duty and mortgage duty for eligible first home buyers and there are no income or assets tests to qualify for the benefits. The Office of State Revenue will be at the show to answer any questions you may have regarding eligibility for government grants and concessions and will be presenting free seminars daily.
Sydneysiders looking to buy their next investment property will also find all the information and advice they need at the show and there is also an Apartment Living Zone which will showcase some of the inner city, off the plan developments currently available in Sydney.
Sydney real estate's $1m first home benchmark
Source: SMH, Heath Gilmore and Michelle Singer
November 11, 2007
RECORD numbers of people being given the $7000 First Home Owner Grant are buying million-dollar-plus properties.
There were 1319 grants handed over to NSW residents in the past three years under the federally funded First Home Owner Grant Scheme, which were used to purchase homes costing more than $1million.
Figures obtained by The Sun-Herald under freedom of information laws reveal that a record 570 grants were obtained to buy million-dollar-plus properties in the 2006 to 2007 financial year - a 44 per cent increase on the previous year.
Property experts say the figures reflect the $1 million benchmark buyers now need to reach to purchase a home in Sydney's more exclusive suburbs and those close to the CBD.
The $7000 grant, introduced to help people buy their first home and offset the impact of the GST, has helped purchase homes in suburbs including Mosman, Paddington, Killara, St Ives and Balmain.
The federal grant scheme, which is administered by the NSW Government, is not means-tested and there is no limit on the price of the home involved in the transaction.
Only one grant is payable per eligible transaction, regardless of the number of eligible applicants involved in the transaction. For example, if three eligible applicants are involved in the purchase of a property, only one payment of $7000 will be made.
Neither the federal Coalition nor Labor signalled a willingness to support means testing of the taxpayer-funded scheme.
However, a number of state governments have called for the scheme to be overhauled. West Australian Treasurer Eric Ripper and Deputy Opposition Leader Troy Buswell want the Federal Government to tighten eligibility.
NSW Treasurer Michael Costa declined to comment.
Leading property figures were unsurprised by the thought of property investors wanting to use the grant when buying million-dollar first homes in Sydney.
Intelligent Finance director Justin Doobov said he has first home buyer clients borrowing money for properties valued up to $4 million.
"More often than not these top end buyers are going in with a large cash deposit," he said. "They are not borrowing 80 per cent. They have either inherited money, they have got money as a gift or they have saved up a lot of bonuses.
"Funnily enough the First Home Owner Grant does mean something to many of them.
"They won't notice it in the scheme of things but it's an extra bit of cash that goes into the kitty.
"If you look at the property market you need to spend that amount. To buy a freestanding house in the eastern suburbs you need to spend a minimum $1.5 million. Even $2 million doesn't buy that much."
Securing high-income jobs, saving large deposits or using a cash gift from parents is contributing to the ability of people to buy expensive properties.
Raine & Horne CEO Angus Raine agreed and said the term "first home buyer" took on a new meaning when applied to house hunters in the eastern suburbs.
"You can't get much under $2 million if you are a family with one or two kids on the ground," he said.
"It's not a surprise in Sydney to find first home buyers are spending $1 million or more on a home.
"They give some back through income tax and stamp duty so it all stays in the system."
Mr Raine said there was no need for the grants to be means tested based on property value.
A spokeswoman for the federal Treasurer, Peter Costello, said the Government's First Home Owner Grant gave assistance to all first home buyers.
"In 2006-07 there were 46,759 grants paid to first home buyers in NSW. Only 1.2 per cent were for properties above $1 million," she said.
"On a million-dollar property the NSW Government will tax the buyer $40,490 in stamp duty. In other words, the tax collected from the person who receives the First Home Owner Grant is six times the value of the grant.
"Rates and thresholds have not changed in NSW since 1986, except in 2004, when a premium property duty was introduced for houses valued over $3 million. Cutting taxes and more land availability would make a real difference for first home buyers."
Mortgage repossessions have skyrocketed across Sydney, particularly in the western suburbs and on the Central and North coasts, official Supreme Court data obtained under Freedom of Information laws shows.
Writs for possession have more than doubled in the past three years, rising from 1170 in 2003 to 3642 in 2006. A further 2196 applications were issued over the year to August this year. The writs are issued by courts against borrowers who have failed to meet repayment obligations.
In 2006 Australian Property Monitors found that 59 Sydney suburbs had a median price of $1 million or more for a house.
It also found that a two-tiered property market continued to grow last year - premium markets continued to surge while Sydney's west and south-west were sluggish
To read more, please visit
SMH.
