UP TO $40,000 IN GOVERNMENT GRANTS AVAILABLE IN SOUTH AUSTRALIA
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There are currently 2 grants available to eligible home buyers in South Australia, the federal HomeBuilder Grant of $25,000 and the state First Home Owners Grant (FHOG) of $15,000. Below is a overview of each grant and the respective criteria.
HOMEBUILDER GRANT
HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home, purchase a new home ‘off the plan’ or substantially renovate an existing home. HomeBuilder will assist the residential construction market by encouraging the commencement of new home builds and renovations this year.
Summary
HomeBuilder is a time-limited grant program to help the residential construction market to bounce back from the Coronavirus crisis.
HomeBuilder will provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home, purchase a new home ‘off the plan’ or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020. Construction must commence within three months of the contract date.
HomeBuilder will complement existing State and Territory First Home Owner Grant programs, stamp duty concessions and other grant schemes, as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.
Eligibility
To access HomeBuilder, owner-occupiers must meet the following eligibility criteria:
• you are a natural person (not a company or trust);
• you are aged 18 years or older;
• you are an Australian citizen;
• you meet one of the following two income caps: $125,000 per annum for an individual applicant based on your 2018-19 tax return or later; or
$200,000 per annum for a couple based on both 2018-19 tax returns or later;
• you enter into a building contract between 4 June 2020 and 31 December 2020 to either: build a new home as a principal place of residence, where the property value does not exceed $750,000; or
substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property does not exceed $1.5 million;
• construction must commence within three months of the contract date.
Case Study Examples
First home buyers Emma and Liam decide to purchase a house and land package
Emma and Liam enter into a house and land contract for $550,000 on 25 September 2020. Emma and Liam’s bank applies on the couple’s behalf to the relevant State or Territory revenue office to receive the HomeBuilder $25,000 grant. The revenue office conducts the eligibility checks and reviews the couple’s documentation and confirms that both Emma and Liam are Australian citizens, over the age of 18, have a combined taxable income under $200,000 based on their 2018-19 tax return and the value of the contract is under the $750,000 contract price cap.
As the couple are both first home buyers, Emma and Liam may also be entitled to their State’s First Home Owner Grant and stamp duty concessions as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.
First home buyer Rebecca decides to purchase an off-the-plan house
First home buyer Rebecca enters into a contract to purchase an off-the-plan house valued at $550,000 on 6 October 2020.
Rebecca’s bank applies on her behalf to the relevant State or Territory revenue office to receive the HomeBuilder $25,000 grant. The revenue office conducts the eligibility checks and reviews Rebecca’s application documentation. The revenue office confirms that Rebecca is an Australian citizen, over the age of 18, has a taxable income under $125,000 based on her 2018-19 tax return and the value of the off-the-plan house is under the $750,000 contract price cap.
As Rebecca is a first home buyer, she may also be entitled to their State’s First Home Owner Grant and stamp duty concessions as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.
Owner-occupiers Carla and Andrew decide to build a new home on a vacant block
Carla and Andrew decide to build a new home on a vacant block of land that they already own. The value of the vacant block is $400,000 and the building contract that Carla and Andrew sign is for $300,000. Carla and Andrew enter into the building contract on 4 July 2020 and make the first progress payment when construction commences on 2 August 2020.
The State that Carla and Andrew live in signs the HomeBuilder National Partnership Agreement on 23 August 2020 and starts to receive HomeBuilder applications through the revenue office on 27 August.
Carla and Andrew apply for HomeBuilder via the relevant revenue office which conducts the eligibility checks and confirms that both Carla and Andrew are Australian citizens, over the age of 18, have a taxable income under $200,000 based on their 2018-19 tax returns, the value of the property (house and land) is less than $750,000, the contract was signed on or after 4 June 2020 and before 31 December 2020, and they have made the first progress payment. The revenue office approves the application.
As Carla and Andrew are not first home buyers, they are not eligible for the First Home Owner Grant, the First Home Loan Deposit Scheme or the First Home Super Saver Scheme.
FIRST HOME OWNER GRANT (FHOG)
First Home Owner Grant provides eligible first home buyers with a grant of $15,000 to purchase a new home, build a new home or purchase a new home ‘off the plan.
Summary
The First Home Owner Grant (FHOG) is paid by the State Government to eligible first home owners. The payment is made only after an application has been submitted to and approved by RevenueSA or a financial institution authorised by RevenueSA to process applications.
FHOG applies to the purchase or construction of a new residential property, including a house, flat, unit, townhouse or apartment that meets local planning standards anywhere in South Australia. FHOG ceased for established homes from 1 July 2014.
The residential property must be occupied as each applicants’ principal place of residence for a continuous period of at least six months commencing within 12 months of date of settlement for contracts to purchase, or the date construction is completed for owner builders or contracts to build.
Eligibility
- At least one of the applicants must be an Australian citizen or have permanent residency in Australia. New Zealand citizens permanently residing in Australia who hold Special Category Visas may also apply.
- The applicant(s) or their spouse(s)/domestic partner(s) must not have previously owned a residential property anywhere in Australia prior to 1 July 2000.
- The applicant(s) or their spouse(s)/domestic partner(s) must not have owned a residential property anywhere in Australia on or after 1 July 2000 and occupied that property continuously for six months or more.
- All applicants must occupy the home
purchased or built as their principal place of residence for a continuous
period of at least six months commencing within 12 months after completion of
the eligible transaction.
It is the responsibility of the applicant(s) to satisfy the Commissioner that they have meet the residency requirements. Applicants may be required to verify this later by providing documentation supporting their period of occupancy (e.g. electricity and gas accounts, bank statements, landline and/or mobile phone accounts and household contents insurance policies).
Applicants who do not meet the residency requirements must contact RevenueSA in writing within 14 days of the date on which it first became apparent that the residency requirements would not be complied with, and repay the grant. - Each applicant must be a natural person (i.e. not a trustee or company) except in the cases of legal disability.
- Each applicant must be at least 18 years of age at the time of making application for the FHOG.
- The property purchased has a market
value of $575 000 or less.
A property value cap applies to applicants who entered into a contract to purchase or build a home on or after 17 September 2010, or who commence construction as owner builders on or after 17 September 2010. The property value cap is $575 000 and applies to the market value of the property purchased or built.
In the case of a contract to purchase a home the market value is: - the consideration for the purchase of the home; or
- where the consideration is less than market value, the market value of the property.
In the case of a comprehensive building contract the market value is:
- the sum of the consideration for the building contract and the market value of the property on which the home is to be built as at the time the contract is made; or
- where the consideration for the building contract is less than actual costs, the sum of the actual costs to build the home and the market value of the land on which the home is to be built as at the time the building contract is made.
In the case of an owner builder the market value is:
- the market value of the property on which the home is situated at the time the home is completed and ready for occupation as a place of residence.
NOTE: in the cases of a genuine farm the market value of the property will be determined on the value of the home and curtilage area of that part of the land that is to constitute the site and curtilage of a home that is to be built on that site.
Case Study Examples
- Mark enters into a contract on 22 June 2020 to build a new home. The
contract specifies a construction price of $235 000. The market value of Mark’s
land at the time of build contract execution was $250 000 (resulting in a total
market value of $485 000).
As Mark’s building contract was executed after 14 October 2012 and the market value of his property does not exceed $575 000, a $15 000 FHOG is potentially available, provided that all other eligibility criteria are satisfied.
- Brooke enters into a contract to
purchase a new home on 22 June 2020. The home has never previously been
occupied or sold as a place of residence. The purchase price is $575 000.
As Brooke’s purchase contract was executed after 14 October 2012 and the market value of her property does not exceed $575 000, a $15 000 FHOG is potentially available, provided that all other eligibility criteria are satisfied.
- Daniel enters into a contract to purchase a new home on 22 June 2020.
The home has never previously been occupied or sold as a place of residence.
The purchase price is $620 000.
As the market value of Daniel’s property exceeds $575 000, no FHOG is available.