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Starting in October 2012
A first-home buyer who purchases a $550,000 new home will get $35,240 in assistance. But if it is not new, the first-home buyers will secure nothing.
also there is the New Home Grant Scheme
New Home Grant Scheme
From 1st July 2012, a new $5,000 grant will be provided to buyers of new homes, whether off the plan or newly built, with a value up to $650,000 and to buyers of vacant land that is intend to be the site of a new home valued up to $450,000.
The grant is targeted at all non-first home buyers and is available to investors as well as owner occupiers. The grant will be administered through the transfer duty payment process.
The existing "NSW Home Builders Bonus Scheme" which provides a full exemption on stamp duty on a property up to $600,000 (or vacant land up to $400,000) saving investors up to $22,490 will cease on 1st July 2012.
First Home Owner Grant (New Home) Scheme
From 1st October 2012, the First Home Owner Grant Scheme will be replaced by the First Home Owner Grant (New Home) Scheme. The new scheme will only apply to first home buyers who purchase or build a new home valued at up to $650,000
The grant will increase from $7,000 to $15,000 from 1st October 2012 to 31st December 2013 and to $10,000 from 1st January 2014.
First Home - New Home
From 1st July 2012:
- The transfer duty exemption cap on new homes increases to $550,000 with duty concessions for new homes valued between $550,000 and $650,000
- The transfer duty exemption cap on vacant land increases to $350,000 with duty concessions for vacant land valued between $350,000 and $450,000
Deferred abolition of duties
The abolition of duty on mortgages has been deferred until 1st July 2013
The abolition of marketable securities on unquoted marketable securities has been deferred until 1st July 2013.
The abolition of transfer duty on non-land business assets has been deferred until 1st July 2013.
Land Tax Threshold
The Land Tax Threshold will increase from $387,000 to $396,000 from 1st July 2012. The rate remains the same at 1.6%.
What the changes may mean to you?
These new incentives are likely to pull forward demand from first home buyers. The incentive for investors at $5,000 is nice, but not as generous as the $10,000 previously offered in QLD last year.
If you are a first home buyer seeking a new home, the increased $15,000 grant does not kick in for another 14 weeks. This could mean there is some lag effect for builders.
The deadline for stamp duty concessions with the current home builders bonus has seen some investors rush to get a deal done before June 30. However, my message to all investors and home buyers is to be careful about rushing in and buying just because there is a carrot. The availability of a handout does not mean you should take short cuts with your due diligence.
Interest rates are on the way down, economic growth is gaining momentum (we are the envy of the developed world at 4.2% pa) and unemployment is stable at around 5.2%. Being fundamentally under supplied means our property market provide an excellent opportunity for investor and home buyers to enter the market while sentiment is down.
The 25 things investors need to know about the July NSW $5,000 new home grant scheme
By Property Observer
Tuesday, 12 June 2012
Tuesday, 12 June 2012
1. What is a ‘New Home Grant’?
From 1 July 2012 most purchasers of new homes in NSW valued up to $650,000 will be eligible for a $5,000 New Home Grant.
The Grant will also be available to purchasers of vacant land valued up to $450,000 on which a new home will be built.
2. Who can apply?
The purchaser can be any entity, including natural persons, a company, or trustee of a trust.
It applies to investors as well as owner occupiers.
3. How will the ‘New Home Grant’ be administered?
You can either reduce the duty payable by $5000 on your agreement or transfer or pay the full duty and receive a payment of $5000. This will be paid after completion of your purchase.
4. What agreements or transfers are eligible?
The following types of agreement or transfer are eligible for the grant:
(a) A new home purchase. That is an agreement or transfer for the purchase of land that is the site of a new home that is complete and ready for occupation.
(b) An off the plan purchase. That is an agreement or transfer for the purchase of land intended to be used as the site of a new home, which is to be built before completion of the agreement.
(c) A vacant land purchase. That is an agreement or transfer for the purchase of vacant land that is intended to be used as the site of a new home and which is not an off the plan purchase.
5. When does it apply?
It applies to eligible agreements for sale or transfer entered into on or after 1 July 2012 (other than transfers relating to agreements entered into prior to 1 July 2012).
6. Is there any residency requirement?
No, there is no requirement for the purchaser to live in the home.
7. 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.
8. What is a home?
A home is a building (affixed to land) that:
(a) may lawfully be used as a place of residence, and
(b) is, in the Chief Commissioner’s opinion, a suitable building for use as a place of residence.
A building suitable for a place of residence includes a house, a unit or flat, a townhouse, a villa home, or any other type of self-contained dwelling affixed to land, (including a manufactured home as defined in the Local Government Act 1993) where evidence can be provided that the local Council is satisfied that the dwelling can be occupied as a place of residence.
A building is not suitable for occupation as a place of residence, for example, if the building is a shed or a factory.
9. 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.
10. For a vacant land purchase when must I commence building the home?
The laying of foundations for the home must commence within 26 weeks of completion (settlement) of the purchase, or within any longer period allowed by the Chief Commissioner.
There is no time limit on how long it takes to complete building the home.
11. If I am a first home buyer can I apply for the New Home Grant?
If you are eligible for a stamp duty exemption/concession under the First Home – New Home Scheme, you cannot receive the $5000 New Home Grant.
12. Can I apply for the New Home Grant and the First Home Owner Grant?
If you are eligible for a First Home Owner Grant, you cannot receive the $5000 New Home Grant for the same property.
13. Can I apply for the New Home Grant and the Regional Relocation Grant?
Yes, if eligible you can apply for the $5000 New Home Grant and the $7000 Regional Relocation Grant.
Regional Relocation Grant
14. When must applications be made?
Applications must be made within three months of the date of the agreement for sale (or transfer where there is no preceding agreement). This includes off the plan purchases.
The Chief Commissioner may accept an application after expiry of the three month period if satisfied that the delay in making an application was caused by circumstances beyond the control of the applicant or applicants.
15. Does the scheme apply to replacement agreements?
An agreement for the sale or transfer is not eligible if:
(a) it replaces an agreement made before 1 July 2012, and
(b) the replaced agreement was an agreement for the sale or transfer of substantially the same property.
16. Can the home or land be used for other purposes?
An agreement or transfer is not eligible if the new home, or the land on which the new home is located or to be built, is intended to be used for any purpose other than residential (such as commercial, industrial or professional).
However, eligible for consideration is:
(a) an agreement for the purchase of a farming property on which there is a new home or on which a new home is to be constructed
(b) an agreement for the purchase of a new home from the developer of a display home that has only been used, or is only going to be used, by the developer as a display home.
17. Must the agreement be for the whole of the land?
The agreement or transfer must be for the whole of the land or, if the land is a parcel of land on which two or more homes are built, or are being built (such as a duplex), for one of those homes.
18. Can I get the grant more than once?
Yes, as long as the requirements are satisfied.
19. What if my contract is aggregated with another contract and both are new homes?
Each contract for the purchase of a new home will be eligible for the $5000 New Home Grant.
20. Can I get the grant if I’m purchasing an existing home to knock down and build a new home on the land?
No, the agreement must be for the purchase of vacant land on which you are going to build a home, or a purchase of a completed new home or a new home off the plan.
21. Can foreign residents apply for the grant?
Yes, but they would first need to meet the requirements of the Foreign Investment Review Board regarding investment in Australia.
22. If an off the plan purchase of a new home is on-sold before completion, can the second contract get the grant?
No, only the first sale is eligible for the grant.
23. Is there an application form?
Yes, a new form and factsheet will be available prior to the commencement of the grant.
24. How will it work if the duty payable is less than $5000?
You can pay the duty and receive a payment of $5000 or you can pay no duty and receive a payment of the difference between $5000 and the duty payable.
25. Is there a minimum purchase price that must be paid to receive the $5000 New Home Grant?
No, there is no minimum purchase price.