Changes to Government Grants For First Home Owners
Are you eligible for the First Home Owner Grant? There are some important changes coming that will include a stamp duty exemption and early access to superannuation for first home buyers from around June 2017 that could significantly benefit you and your family.
What is the First Home Owners Grant?
The First Home Owner Grant (FHOG) is a one-off $10,000 grant available for people buying a new home valued at $750,000 or less. To be eligible to apply this must be the first residential property purchase for both you and your partner in Australia and you must plan to live there for at least 12 months from the date of either settlement or completion of construction. The property must also be one that has not been sold before as a residential property. You must be an Australian citizen or resident.
First Home Owners Can Use Super For First Home Deposit
From July 1 2017 first home owners will now be able to deposit up to $15,000 per year in voluntary contributions towards their superannuation. The cap on these contributions is $30,000 in total and you can combine these savings with your partner. From July 1 2018 new home owners will then be able to apply to withdraw these voluntary contributions to use towards the deposit of their new home. These will be taxed at a marginal rate.
No Stamp Duty for First Home Owners in Victoria
Don’t forget that when you purchase your new home you usually have to pay stamp duty (also known as land transfer duty).
In 2017 the Victorian government announced that first home buyers with properties of $600,000 or less will be exempt from stamp duty. Purchasers must enter into the contract to purchase from July 1 2017 and the property must be their principal place of residence (PPR). You must also satisfy the requirements for the FHOG to be eligible for the exemption. You do not need to be a concession card holder to qualify.
If you do not satisfy the requirements for the exemption, there are still circumstances under which you could apply for concession or reductions to your stamp duty. For instance, even if your property is valued at over $600,000 but under $750,000 or you entered the contract for purchase before July 1 2017, you might still be eligible for a reduction if your home is your principal place of residence (PPR) or the primary home in which you live.
These changes are likely to come into effect from June 2017. To find out more, visit the official State Revenue Office of Victoria website.
To read more about the changes to early access to superannuation, visit the official Australian Tax Office website.