Peter Costello

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Implementation of Election Commitments Regarding The Additional First Home Owners Grant for New Homes

NO.098

Implementation of Election Commitments Regarding The Additional First Home Owners Grant for New Homes

The Prime Minister announced on 9 October 2001 that a re-elected Coalition Government would phase-down the additional $7,000 FHOS grant for new homes to $3,000 for contracts made between 1 January 2002 and 30 June 2002 (inclusive). These grants are additional to the $7,000 base grant.

The Prime Minister also announced more liberal commencement and completion requirements for applications received after the election. These requirements apply to contracts entered into on or after the date of the Prime Ministers announcement on 9 October 2001.

The new commencement and completion requirements for the additional grant are that;

  • the construction of the home must commence within 26 weeks of entering into the contract (instead of 16 weeks under the original scheme); and
  • the contract must specify a completion date within 18 months of the date of commencement (instead of 12 months under the original scheme).

Eligible contracts entered into on or after 9 October that comply with these criteria are eligible for the additional grant. If entered into by 31 December 2001, the additional amount is $7,000 and $3,000 if contracts are entered into between 1 January and 30 June 2002.

The attached fact sheet sets out the details of the additional grant.

The Commonwealth Government will continue to fund the additional grant to first home buyers. The Commonwealth is also funding the base $7,000 grant for all eligible first home buyers, purchasing either new or established homes. In total, grants have been paid to over 235,000 first home buyers at a cost of over $1,816 million since the scheme commenced on 1 July 2000.

Home buyers are also benefiting from lower mortgage interest rates which are now around 6.05 per cent compared to 10.5 per cent when the Government was elected in March 1996. In addition, the abolition of Financial Institutions Duty from 1 July 2001 benefits those with mortgages.

I have written to State and Territory Treasurers with details of the new arrangements. The First Home Owners Scheme will continue to be administered by the States and Territories. Applications can be made through State and Territory Revenue Offices.

CANBERRA
17 December 2001
Contact: Niki Savva or David Alexander. Ph: (02) 62777340

FIRST HOME OWNER GRANT

ADDITIONAL GRANT FOR NEW HOUSING

What is the additional First Home Owner Grant for new homes?

  • The additional First Home Owner Grant will provide for a grant, in addition to the existing $7,000 First Home Owner Grant, for the construction or purchase of eligible new homes.
    • Where the contract is made (or in the case of owner builders where construction starts) between 9 March 2001 and 31 December 2001 (inclusive), the additional grant will be $7,000.
    • where the contract is made (or in the case of owner builders where construction starts) between 1 January 2002 and 30 June 2002 (inclusive), the additional grant will be $3,000.
    • From 1 July 2002, no additional grant will be available.

More generous commencement and completion periods

  • Extended commencement and completion periods will apply for contracts signed between
    9 October 2001 and 30 June 2002 (inclusive)
    • For contracts signed between 9 October 2001 and 30 June 2002 (inclusive), construction of the home must commence within twenty-six weeks (formerly 16 weeks) of entering into the contract.
      • The Commissioner may approve the payment of the grant in circumstances where construction is not commenced within twenty-six weeks of the contract upon being satisfied that the delay is beyond the control of both parties to the contract.
    • For contracts signed between 9 October 2001 and 30 June 2002 (inclusive), the contract must specify a completion date within eighteen months (formerly 12 months) of the date of commencement of construction, or if a completion date is not specified in the contract, completion occurs within eighteen months of the date of commencement of construction.
    • The additional grant of $7,000 applies to contracts entered into between 9 March 2001 and 31 December 2001. For contracts signed between 1 January 2002 and 30 June 2002 the additional grant is $3,000.

Owner Builders and "Off the plan" purchases

The First Home Owner Grant and the extended commencement and completion times are also available to owner builders and those purchasing "off-the-plan". Details of the eligibility criteria are available from State Revenue Offices

How to apply and further information.

Applications for the First Home Owner Grant can be made through financial institutions or State or Territory Revenue Offices. Further inquiries can be made to the following numbers:

  • New South Wales on 1300 130 624
  • Victoria on 13 2161
  • Queensland on 1300 300 118
  • Western Australia on 1300 363 211
  • South Australia on 08 8226 3750
  • Tasmania on 03 6233 3744
  • Australian Capital Territory on 02 6207 0032
  • Northern Territory on 08 8999 7949

17 Dec 2001

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