The 11 things you need to know to secure the $35,240 saving under the October NSW first-home owners' grant scheme

1. What is the First Home Owner Grant (New Home) scheme?

The First Home Owner Grant (New Home) Scheme provides a grant of $15,000 to help eligible first home buyers to purchase or build a new home.

It will replace the current $7000 First Home Owner Grant from 1 October 2012.

2. When does it apply?

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.

3. What is an eligible transaction?

An eligible transaction is:

(a) a contract made on or after 1 October 2012 for the purchase of a new home in New South Wales, or

(b) 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.

4. What is a new home?

A new home is a home that has not been previously occupied or sold as a place of residence, and includes a home that is a substantially renovated home and a home built to replace demolished premises.

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. What is a home built to replace demolished premises?

A home is a home built to replace demolished premises if:

(a) the home is a 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) the home, as built to replace the demolished premises, has not been previously occupied or sold as a place of residence, and

(c) the owner of the home did not occupy the demolished premises as a place of residence before they were demolished.

7. Does the price of the home need to be under a limit to receive the First Home Owner Grant (New Home)?

Yes, effective from 1 October 2012 the First Home Owner Grant (New Home) Scheme is capped to $650,000. The grant will only be available for properties with a total value not exceeding that amount.

8. How is the Total Value of the home calculated?

For a contract of sale of a home, the total value is based on the greater of the following:

• the consideration for the eligible transaction
• the unencumbered value, as at the commencement date of the eligible transaction.

For a comprehensive home building contract, the total value is calculated by adding together:

• the consideration for the eligible transaction, and
• the value, at the commencement date, of the relevant interest of the land on which the home is to be built.

For a building of a home by an owner builder, the total value is calculated by adding together:

• the unencumbered value of the home, at the date the transaction is completed and the value, at the date the transaction is completed, of the relevant interest in the land on which the home is built.
• The value of the relevant interest in the land on which the home is to be built is the greater of the following:

1. the consideration paid or payable for the interest
2. the unencumbered value of the interest.

9. From October 2012 do I get a grant if I buy an existing home?

No, from 1 October 2012, the First Home Owner Grant will only be payable on the purchase of new homes.

The $7000 First Home owner Grant is still available for purchases of existing homes entered into before 1 October 2012.

10. Does the First Home Owner Grant ( New Home) apply to replacement contracts entered into on or after 1 October 2012?

A contract for the sale or transfer is not eligible if:

(a) it replaces an agreement made before 1 October 2012, and

(b) the replaced contract is for the sale or transfer of substantially the same property.

11. Can I get the First Home Owner Grant and the $5000 New Home Grant?

If you receive the First Home Owner Grant, you cannot receive the $5 000 New Home Grant for the same property.

Source: NSW Office of State Revenue