« Index of all Property & Leasing eNews articles | February 2010


New Cap on First Home Owners Grant

The New Year brought in a number of changes to the First Home Owners Grant (FHOG)*.

Firstly, the FHOG boost came to an end meaning that eligible first time buyers will now only receive a grant of $7,000.

And first home buyers for $1 million or more will no longer be eligible to receive any part of the grant.

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In addition, anti-avoidance provisions have been implemented. The Commissioner must now be satisfied that the transaction is not part of a "scheme" to circumvent the cap or any other eligibility or entitlement requirement. This provision is bound to lead to a string of future revenue rulings on what arrangements are "schemes".

Application forms have also changed and the new form must be used from 29 January. The new form should not affect buyers who are applying through their financier but may affect those buyers applying directly.

Certain transaction types (e.g. the sale of a home between related parties and some home construction contracts), now require the buyer to provide the following additional items:

  • a certified copy of evidence that the purchase price has been paid by the buyer and received by the seller (e.g. bank deposit receipt);
  • evidence of the unencumbered value of the property (e.g. a valuation or market appraisal that is less than 12 months old).

* First Home Owners Grant Act and a Public Revenue Ruling (FHOGA000.1.2) which took effect on 1 January 2010.

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