1. First Home Buyers - Are You Eligible?

There are currently a range of grants and stamp duty concessions available to first home buyers, each with their own eligibility criteria.

Prior to entering into Contracts to buy or build a home first home buyers should seek advice with respect to their eligibility to receive one or more of the following grants or concessions.

Grants

First Home Owners Grant (FHOG)

The first home owners grant of $7,000.00 is currently available to eligible purchasers buying or building their first home in NSW.

NSW New Home Buyers Supplement

An additional grant of $3,000.00 is available to first home buyers, buying or building a new home in NSW.

Commonwealth First Home Owner Boost

Additional Commonwealth grants of between $7,000.00 (for existing homes) and $14,000.00 (for new homes) are also available to eligible purchasers until 30 September 2009.

From 1 October 2009 to 31 December 2009 those grants will halve to $3,500.00 and $7,000.00 respectively.

Stamp Duty Concessions

First Home Plus and First Home Plus One

Eligible first home buyers will receive a full stamp duty exemption where the value of the property does not exceed $500,000.00.

Where the value of the property is between $500,000.00 and $600,000.00 partial concessions on stamp duty will be available.

First Home Plus One

Stamp duty savings are also available in certain circumstances where you are a first home buyer, purchasing property in conjunction with other people.

Attorney General, Robert McClelland, recently introduced legislation to create a comprehensive national system of personal property securities (PPS) law. The PSS law governs how personal property may be used as security for a loan.

The Personal Property Securities Bill 2009 creates a single legal framework for lending using personal property as security. The new laws will be supported by a referral of power from the States. New South Wales became the first State to refer their power in this area. The PPS law was intended to commence in May 2010, however, the Senate Standing Committee has recommended that the implementation date for PPS reform be deferred until May 2011.

Personal property securities are interests in property (other than land) that are created or evidenced by an agreement that secures payment or performance of an obligation. The PPS law will establish a system of registration of security interests in personal property. It will give consumers greater certainty in acquiring unencumbered goods by setting up a national online register of PPS interests.

The PPS law will also include new rules for determining priority between competing security interests in the same personal property.

Personal property includes many different kinds of tangible and intangible property including company shares, motor vehicles, intellectual property and business inventory.

A personal loan that is secured against a motor vehicle is one example of a security interest. Other examples include:

• a fixed charge;
• a floating charge;
• a chattel mortgage;
• finance leases;
• margin loans;
• a transfer of title;
• factoring of book debts.

The PPS law will affect banks, financial institutions, business and individuals. For banks and financial institutions, a security interest which is 'perfected', ie. registered, will take priority over another security interest in the same property which is unperfected. Therefore, all lenders will need to ensure that their security interests are registered. For businesses and individuals it will create greater certainty about whether an item of personal property which they may be purchasing is subject to a security interest.

Over the coming months there will no doubt be changes to the draft legislation and we will keep you updated.

The NSW State Government has recently introduced the NSW Housing Construction Acceleration Plan (HCAP) to stimulate the construction of new homes.

HCAP allows a purchaser of a residential property (excluding first home buyers) to receive a 50% discount on stamp duty if:

• The value of the property does not exceed $600,000.00;
• Contracts are exchanged between 1 July 2009 and 1 January 2010; and
• The property is new and has not previously been occupied or sold as a residence and:
• • is complete and ready for occupation; or
  • is completed and settlement is effected before 30 June 2011; or
  • the Contract requires completion before 30 June 2011;

The Contract must include the land on which the home is built (i.e it can not just be for construction of a home on land already owned by an investor).

There is no limit on the number of properties that can be purchased. The Purchaser is not required to be a natural person.

Level 29, 1 Market St Sydney NSW 2000
Ph: (02) 9267 3388
Fax: (02) 9267 3688