Changes to First Home Owners Grant

[Guest Jim Scott]

Changes have just been announced by Revenue SA - see below. The announcement is detailed below. See the source: RevenueSA for more info.

 

Retargeting and Enhancement of the First Home Bonus Grant

 

The First Home Bonus Grant was announced in the

2008-09 Budget to replace the first homebuyer stamp duty concession. Under existing arrangements, first home buyers who qualify for the Government’s First Home Owner Grant are also eligible for a First Home Bonus Grant of up to $4000. A $4000 First Home Bonus Grant is provided in respect of first homes with a market value up to $400 000 and phases out for first home purchases valued between $400 000 and $450 000.

 

The First Home Bonus Grant will increase from $4000 to $8000 for first home buyers who build or purchase a newly constructed home in relation to eligible transactions entered into on or after 17 September 2010. First home buyers who build or purchase a newly constructed home valued up to $400 000 will receive the full benefit of the bonus. The bonus phases out for first home purchases of newly constructed homes valued between $400 000 and $450 000.

 

The First Home Bonus Grant will no longer be available to purchasers of existing homes. Eligible purchasers of existing homes will however continue to receive the $7000 First Home Owner Grant.

 

Until the Bill is passed by Parliament, the First Home Bonus Grant will be provided by way of an ex gratia payment.

Introduction of a Property Value Cap

 

A cap of $575 000 on the market value of properties eligible for the First Home Owner Grant has also been introduced. The cap will be introduced for eligible transactions entered into on or after 17 September 2010.

 

The new Intergovernmental Agreement on Federal Financial Relations (IGA) signed in December 2008 allows states and territories to impose a cap on the market value of homes eligible for the First Home Owner Grant. The cap cannot be less than 1.4 times the relevant jurisdiction’s capital city median house price. The Adelaide median house price as at the June quarter 2010 was $410 000. Accordingly, a cap of $575 000 is consistent with IGA requirements.

 

The cap will be reviewed annually once June quarter median house price data is available from the State Valuation Office.