Jonathan Chancellor | 6 September 2011

The 12 key points to NSW's stamp duty entitlements from 2012

1. What is the nature of the scheme?

The scheme is intended to help people who are acquiring a new home that is their first home. It replaces the First Home Plus Scheme from January 1, 2012.

2. When does it apply?

It applies to eligible agreements for sale or transfers (where there is no agreement) entered into on or after 1 January 2012.

3. Who is eligible to apply?

An 'eligible purchaser' is a natural person (i.e. not a company or trust) at least 18 years of age who has not, and whose spouse/de facto has not:

  • at any time owned (either solely or with someone else) residential property in Australia other than property owned solely as trustee or executor
  • at any time been the holder (either solely or with someone else)of a leasehold interest granted by the Commonwealth in residential property in the Australian Capital Territory
  • previously received an exemption or concession under the scheme.

4. What agreements or transfers are eligible?

The agreement or transfer must be for the acquisition of a first home which is a new home or a vacant block of residential land intended to be the site of a first home. This includes the acquisition of:

  • (a) a new home (that is a home that has not been previously occupied or sold as a place of residence)
  • (b) a substantially renovated home
  • (c) a vacant block of residential land (that is an agreement for the sale or transfer of vacant land that is intended to be used as the site of a first home).

5. 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.

6. Does the normal residency requirement still apply?

Yes, it applies to the first home buyers. That is, at least one of them must occupy the home as their principal place of residence for a continuous period of six months commencing within 12 months from completion of the agreement.

7. Are there value limits?

Yes.

  • a) $600,000 in the case of a new home purchase or an off the plan purchase, or
  • b) $450,000 in the case of a vacant land purchase.

8. For a vacant land purchase when must I commence building the home?

There is no time limit on how long it takes to commence or complete building the home. It is sufficient that the Chief Commissioner is satisfied that the vacant block is intended to be used as the site of a new home to be occupied by the first home owner or one of the first home owners.

9. Does this apply to agreements executed before 1 January 2012?

No, the First Home Plus concessions and exemptions continue to apply if:

  • (a) an agreement for sale or transfer is entered into before 1 January 2012
  • (b) a transfer occurs before 1 January 2012
  • (c) transfers that occur on or after 1 January 2012 are made in conformity with an agreement for sale or transfer that is entered into before 1 January 2012.

10. Can applicants apply for the First Home Owner Grant even if they do not qualify for the First Home – New Home exemption or concession?

Yes, eligible applicants can apply for the grant.

11. Can I get the exemption or concession 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.

12. Will mortgage duty be payable on any loan to finance the purchase?

No, mortgage duty is not chargeable on a mortgage that secures an advance that is made for owner occupied housing.

Full details here.

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