Simon Cody of Port Home Loans talks about the office of state revenue
by Simon Cody
Lending Manager, Port Home Loans
If you were thinking of buying a house, before the 01/08/2011 is the time to do it to save on stamp duty.
Further information has been released by the Office of State Revenue in relation to the recent changes to transfer duty and the Building Boost Grant.
Today I'll help clarify when the new transfer duty rates apply and provide more detailed information regarding the Building Boost Grant.
Home Concession – transfer duty liability
Where a contract is entered into, the transfer liability date will be the date of the contract. This means that if a contract is entered into prior to 1 August 2011 the current transfer duty rates apply.
The Home Concession for transfer duty will not apply to transactions where the transfer duty liability date is on or after 1 August 2011.
Building Boost Grant
This is a grant of $10,000 for a person, corporation or trustee of a trust (including superannuation Funds) buying or building a new home in Queensland for a value of less than $600,000.
The grant applies to any transactions entered into between 1 August 2011 and 31 January 2012 and includes:
- A contract to purchase a new home;
- A comprehensive home building contract; and
- The building of a home by an owner builder if the building work starts between 1 August 2011 and 21 January 2012. The start of building work is defined as laying the foundations for the home.
More definitions - A new home is:
- A home that has not been previously occupied or sold as a place of residence; or
- A substantially renovated home.
And even more - What is a substantially renovated home?
- The home is the subject of a contract for the purchase of the home;
- The sale of the home under the contract is under Section 40-75 (1)(b) of A New Tax System (Goods and Services Tax) Act 1999 (Cth), a taxable supply as a sale of new residential premises.
- Substantial renovations are renovations in which all, or substantially all, of a building is removed or replaced. However, the renovations need not involve removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases.
- The home, as renovated, has not been previously occupied or sold as a place of residence.
Who CAN'T obtain the grant?
The grant is not payable for a building contract, or to an owner builder, if the applicant carries on the business of building homes and the home was constructed for sale in the course of that business.
What about ‘off the plan’ contracts?
The grant will apply to any ‘off the plan’ contract entered into between 1 August 2011 and 31 January 2012 as long as the building work is completed by 31 July 2013.
- For a comprehensive home building contract, the building work must commence within 26 weeks of the date of the contract and be completed within 18 months of work starting.
- For an owner- builder, building work must be completed within 18 months of work starting; and
- For a contract to purchase a new home off the plan, the building work must be completed by 31 July 2013.
To be eligible for the grant the home must be first occupied as a place of residence. It does not matter who occupies the home and a tenant or family member can occupy the home.
A builder who builds a home and sells it before it is occupied cannot claim the grant.
The grant is available for each new home purchased or built.
Replacement contracts will not qualify for the grant. This means that only new contracts entered into after 1 August 2011 will be eligible for the grant. The new contract cannot be a replacement of a previous contract entered into prior to 1 August 2011.
I hope this helps clarify these important aspects you need to think about when purchasing a new home. Feel free to call me at Port Home Loans on 07 4099 4337 should you need some more info.