The $10,000 First Home Owner Grant applies to some renovated properties.

The $10,000 First Home Owner Grant is only for new properties – or is it?

As you may know, the First Home Owner Grant changed last year to provide just $3,000 to buyers of established homes, while raising the grant to $10,000 for buyers of new homes.

But did you know that brand new homes aren’t the only ones that allow buyers to apply for the $10,000 grant?

Buyers of “substantially renovated” homes may also be eligible for the $10,000 grant – provided they meet the many requirements of the Office of State Revenue. To be eligible for the new home grant, buyers of renovated homes need to meet the requirements laid out in the Commissioner’s Practices, which include:

  • The home must be “substantially renovated”. The Commissioner must be satisfied that the renovation affected the building as a whole or most rooms in the building, and that the renovations resulted in the removal or replacement of substantially all of the building.
  • The sale must be subject to GST (a “taxable supply”) on the basis that it is a sale of new residential premises.
  • The property must not have been occupied or sold as a residence since the renovations were completed.
  • The applicant must meet the other eligibility criteria for the First Home Owner Grant.

For example, the buyer of a townhouse purchased directly from the developer, which was one of four townhouses previously used as a church before being converted, may be eligible for the $10,000 grant. But the buyer of a house that was renovated by the vendor to remove a large wall between two bedrooms would not be eligible, as the renovations were not substantial enough, and the sale was not a taxable supply.

When applying for the grant, the applicant must demonstrate the extent of the renovations by providing various documentation, such as council approvals, a statement from the vendor, floor plans, and evidence that the sale was a taxable supply.

If a buyer applies for the $10,000 grant but is judged ineligible, they will still receive the $3,000 established home grant if they are eligible for it.

This article provides a brief overview only, so please see the Commissioner’s Practices on the Office of State Revenue website for full details.

Edit

The WA State Government has since abolished the $3,000 grant for first home buyers purchasing an established property on or after 3rd October 2015. First home buyers who purchased a property prior to that date can still apply for the FHOG and related first home owner rate of duty for a period of 12 months after completion of the eligible contract.

On or after 3rd October 2015  purchasers of established homes will still be able to apply for the first home owner rate of duty if the value of the home is below the current threshold of $530,000.

The FHOG of up to $10,000 for ‘new’ homes will remain unchanged.

Image by Michèle Turbin via Flickr.