From 1 January 2012 the “First Home Plus” scheme currently in place in New South Wales will no longer apply and the current exemptions and concessions of stamp duty will no longer be available to first home buyers.
At present, the “First Home Plus” scheme provides an exemption from stamp duty for any purchase of a first home under $500,000.00 and a concession of stamp duty for a purchase of a first home for more than $500,000.00 but less than $600,000.00. There are also exemptions and concession available for purchases of vacant residential land up to $450,000.00.
On 1 January 2012, the “First Home – New Home” scheme will replace the “First Home Plus” scheme in New South Wales which was brought about by the introduction of the Duties Amendment (First-Home-New Home) Act 2011 (NSW) which was given assent on 20 September 2011 and this legislation will commence on 1 January 2012.
The “First Home – New Home” scheme will only apply to agreements entered into, and Transfers which occur, on or after 1 January 2012 for property located in New South Wales.
This will mean that first home buyers will only be eligible to receive a concession or exemption from stamp duty if they purchase one of the following:
- A new home (that has not been previously occupied or sold as a place of residence);
- A substantially renovated home
- A vacant block of land (this can be under an agreement of sale or transfer of vacant land that is intended to be used as the site of a first home and there is no time restriction to build on this vacant land)
There are also still limits on the dutiable value (purchase price) of the property in order to receive an exemption from stamp duty:
- The purchase price of the new home must not be more than $500,000.00 to receive the full exemption from stamp duty
- The purchase price of a block of vacant land intended to be the site of a new home must not exceed $300,000.00 to receive the full exemption from stamp duty.
First home purchasers will also be eligible to receive a concession of stamp duty where:
- The purchase price of the new home or off the plan property is over $500,000.00 but no more than $600,000.00; or
- The purchase price of a vacant block of land is over $300,000.00 but no more than $450,000.00.
First home buyers will not be able to gain the benefits of the “First Home-New Home” scheme if they purchase an existing home to knock down and rebuild a new home on.
A substantially renovated home is defined as:
- A new residential premises within the meaning of section 40-75(1)(b) of the New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth; and
- That, as renovated, has not been previously occupied or sold as a place of residence
“Substantial renovations” of a building is defined under that legalisation 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.”
The normal eligibility requirement that a first home purchaser must occupy the home as their principal place of residence for a continuous period of six (6) months commencing within twelve (12) months from the completion of the agreement will still apply.
The $7,000.00 First Home Owners Grant will continue to be available to all eligible first home buyers as it has previously.
First home buyers will still be eligible to receive the current” First Home Plus” scheme exemptions and concessions of stamp duty for agreements entered into, and Transfers which occur, on or before 31 December 2011.