The NSW Treasurer, the Hon. Michael Bruce Baird, MP announced the following changes to State taxes and grants as part of the 2012 State Budget:
New Home Grant Scheme
From 1 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 intended to be the site of a new home valued up to $450,000. The grant is available to investors as well as owner occupiers. Applicants can either reduce the duty payable by $5,000 on the contract or pay the full duty and receive a payment of $5,000 after completion of the purchase.
Eligibility requirements
The grant 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). The following types of agreement or transfer are eligible for the grant.
- 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.
- 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.
- 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.
Unlike the First Home Owners Grant scheme, there is no requirement for the purchaser to live in the home. Applications must be made within three months of the date of the contract for sale (or transfer where there is no preceding contract). Applicants may apply for this grant more than once as long as the eligibility requirements are satisfied.
First Home – New Home
The current First home – New Home Scheme provides exemptions or concessions on transfer duty for eligible first home owners buying their first new home (including an off the plan purchase).
From 1 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 cap on vacant land increases to $350,000 with duty concessions for vacant land valued between $350,000 and $450,000.
If an applicant is eligible for a stamp duty exemption or concession under the First Home – New Home Scheme, the applicant cannot receive the $5,000 New Home Grant.
First Home Owner Grant (New Home) Scheme
The current $7,000 First Home Owner Grant for established properties ends on 30 September 2012.
From 1 October 2012, the First Home Owner Grant Scheme will be replaced by the First Home Owner Grant (New Home) Scheme. In addition to the duty exemption or concession under the First Home - New Home Scheme, from 1 October 2012 to 31 December 2013 a new $15,000 grant will be provided to eligible first home owners who purchase or build a new home valued at up to $650,000.
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.
An eligible transaction is:
- a contract made on or after 1 October 2012 for the purchase of a new home in New South Wales, or
- 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.
If an applicant receives the First Home Owner Grant of $15,000, they are not eligible for the $5,000 New Home Grant for the same property.
In each case the duty concessions and grants will be administered by the Office of State Revenue.
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To view the contact details of the entire TressCox Property team, please click here.
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