In NSW, there are a number of first home benefits for people buying or building their first new home. In this article, we outline the First Home Owner Grant Scheme in NSW (the Scheme). The First Home Owner Grant Scheme was introduced in July 2000, to offset the effect of the 10% goods and services tax. Each state and territory has some form of a first homeowner benefit scheme. Each scheme is administered by its own state and/or territorial laws. In NSW, the First Home Owner Grant Scheme is administered by the Office of State Revenue.
The First Home Owner Grant Scheme gives first homeowners a $15,000 grant to buy or build a new home. On 1 January 2016, the first homeowner grant will be reduced to $10,000. The first homeowner grant can be paid after settlement or on the first payment made on a contract to build.
New homes
The law defines a new home as a home that has not been previously occupied or sold as a place of residence. A new home also includes a substantially renovated home and a home built to replace demolished premises.
Am I eligible?
The law sets out a number of eligibility criteria, including that:
- an applicant must be at least 18 years of age. You may apply for an exemption if you are a genuine home buyer and are younger than 18;
- at least one of the applicants must be an Australian citizen or permanent resident;
- the applicant or applicant’s spouse must not have received a first homeowner grant before;
- the applicant or the applicant’s spouse must not have held a “relevant interest” in a property before 1 July 2000. The law sets out a detailed definition of a “relevant interest”. As a rough guide, however, a “relevant interest” will mean that the applicant will have certain rights to live in a property. The legal definition includes being the lessee on certain types of leases. It also includes certain types of share ownership if the ownership entitles the owner to rights of occupation in a property;
- at least one of the applicants must start living in the property within 12 months after its purchase or completion and live in it for at least 6 months. Exemptions to the residency rule exist for permanent members of the Australian Defence Forces and/or if you are on the NSW electoral roll
Other criteria
If you are unsure whether these criteria apply to you or you think that there is a good reason why some should not apply to you, then please call Owen Hodge Lawyers who would be happy to advise you whether you may qualify for, or might apply, for an exemption.
There are a number of other criteria that must be fulfilled in order for the purchase/build to be eligible for the Scheme. For example, the Scheme only applies to contracts to buy or build a new home in NSW made on or after 1 October 2012. In addition, the Scheme will not apply to a property that is worth $750,000 or more, if the contract to buy or build the property was made on or after 1 July 2014.
Penalties
It is a criminal offence for you to knowingly provide false or misleading information with the intention of being paid the grant. You may be prosecuted.
More commonly, people fall foul of the rules of the First Home Owner Grant Scheme because they have misunderstood the residency requirements. In these situations, the applicant must pay back the grant. The Office of State Revenue maintains information about the residency requirement on its website. Alternatively, if you are unsure as to your particular situation, Owen Hodge Lawyers would be happy to discuss it with you.
How to apply
You can apply for the First Home Owner Grant Scheme either:
- directly, through the Office of State Revenue; or
- through an approved financial institution. The Office of State Revenue maintains a list of all approved financial institutions on its website.
There are a number of first home benefits available. You may be eligible for additional benefits, including duty concessions under the First Home – New Home Scheme. Alternatively, even if you are not eligible for one scheme, you may be eligible for other types of benefits. The Office of State Revenue’s website has further information on the benefits available. Owen Hodge Lawyers would be happy to discuss which benefits you are eligible for and to guide you through the application process, ensuring that you understand your rights and obligations under each first home owner grant scheme.
Next steps
There are a number of first home benefits available. You may be eligible for additional benefits, including duty concessions under the First Home – New Home Scheme. Alternatively, even if you are not eligible for one scheme, you may be eligible for other types of benefits. The Office of State Revenue’s website has further information on the benefits available.
Owen Hodge Lawyers would be happy to discuss which benefits you are eligible for and to guide you through the application process, ensuring that you understand your rights and obligations under each scheme. Call us today at 1800 770 780 or contact us via [email protected] for a consultation with one of our experienced property lawyers.