First Home Owners Grant (FHOG)

State Budget impacts Real Estate Industry: First Home Owner Grant abolished & Transfer Duty increased


The following is a summary of the changes.

1. Changes to First Home Owner Grant

• Currently, eligible buyers purchasing their first home worth less than $750,000 (whether an existing or newly constructed dwelling) are entitled to receive the First Home Owner Grant (FHOG) of $7,000.

• First home buyers purchasing existing dwellings will have until 10 October 2012 to finalise their contract to be eligible for the existing $7,000 FHOG. The contract must be dated on or before 10 October 2012.

• From 11 October 2012, there will be no grant available to first home buyers purchasing existing dwellings.

• From 12 September 2012, first home buyers purchasing newly constructed or off -the-plan dwellings will be eligible for the First Home Owner Construction Grant (FHOCG). The FHOCG is a grant of $15,000

• The following eligibility criteria applies to the First Home Owner Construction Grant:-

(i) the property must become the Buyer's principal place of residence within one year of taking ownership.

(ii) the property must be the Buyer's principal place of residence for at least six months.

(iii) the Buyer must not dispose of all or part of the property within one year after the Buyer starts to occupy the residence as the Buyer's home.

(iv) The property must be bought or built at a value under $750,000.

2. Top Transfer Duty rate increased

The rate of transfer duty payable for property worth $1,000,000 or more will increase from $5.25 for every $100 over $980,000 to $5.75 for every $100 over $1,000,000.

An example of the increase is illustrated below, although this is not likely to worry too many buyers I iur Coolum/ Marcoola market

Home purchase of $1,200,000

Existing duty: $41,500

New duty: $42,350*

The transfer duty rate changes will come into effect once the legislation receives final assent. At this stage, therefore,it is not known when the new transfer duty rates will commence.

* Note, this calculation is based on the proposed changes which are not yet law. It is for indicative guidance only and should not to be relied upon as legal advice.