Queensland Building Boost / First Home Owners Grant and Transfer Duty

The Queensland State Budget announced on the 14th June included changes which may significantly affect the property industry particularly over the next six (6) months.

The scrapping of the stamp duty concession for purchasers trading up to an existing home has widely criticised by the real estate industry and our opinion is that given the increasingly softening property market it is difficult to support.

A positive measure is the new $10,000.00 ‘building boost’ grant for purchases of new homes. Criticisms of the grant include the fact that it applies to transactions during a six (6) month period only from 1 August 2011 and 31 January 2012.

Queensland Building Boost Grant

Some of the key points are:-

Relates to transactions entered into between 1 August 2011 and 31 January 2012 (inclusive) being:

• A contract to purchase a new home in Queensland.
• A house and land package Contract/Building Contract.
• The building of a home by an owner builder where the works start during those dates.
• The amount payable is $10,000.00.
• The value of the home must be less than 600,000.00.
• Where a Building Contract is entered into then:
• For a land and house package the building work must commence within 26 weeks of the date of the Contract and be completed within 18 months of the work starting.
• For an owner builder, the building work must be completed within 18 months of the work starting.
• For an off the plan Contract, the building work must be completed by 31 July 2013.
• The Buyer does not have to reside in the home.

The grant applies to all persons, corporations and trustees. In other words it is not restricted to first home buyers or owner occupiers. Companies and trusts can claim.
A person may obtain more than one grant but only one grant will be made per property. In other words if one person contracts to construct 6 new homes that person can attract 6 grants, each of $10,000.00.

First Home Owners Grant

• The FHOG remains and is payable to eligible applicants in addition to the Queensland Building Boost Grant ($10,000.00).
• The conditions for FHOG remain the same (i.e. residence requirements and applicability to properties less than $750,000.00).
• A person can be eligible and receive both grants, and if so received $17,000.00.

Transfer Duty

The Queensland Government claims that the Grant is being funded by the removal of concessional stamp duty for the acquisition of a principal place of residence. In other words, except in relation to first home buyers, buyers of properties, be it for a principal place of residence or for investment, will pay the same rate of stamp duty.

Concessional rates of stamp duty for purchasers of owner occupied properties will close 31 July 2011. In other words, the concessions will only apply to Contracts entered into by 31 July 2011.

Furthermore, the Government has altered the threshold rates for property values between $5,000.00 and 980,000.00. However, transfer duty for properties more than $980,000.00 in value will not alter ($37,125.00) other than the loss of concessional rates for principal place of residence.

The first home vacant land concession now applies to first home vacant land under $260,000.00 in value (previously $255,000.00).

The first home concession rates now apply to properties less than $510,000.00 in value, an increase of $5,000.00.