Homebuyers Get a Break… Reinstatement of Home Concession

home concessionOn 10 April 2012, the Premier announced that Cabinet approved the reinstatement of the home concession from 1 July 2012.

Transfer duty applies to a range of transactions relating to Queensland property including a transfer, or agreement for transfer, of a person’s home. Duty is calculated on the greater of the value of the property or the consideration paid.

Currently, a concession is available for the transfer, or agreement for the transfer, of a person’s first home (first home concession). No duty applies for homes up to $500,000, and a phasing-out rebate applies for values up to $600,000. To qualify, the person must never have previously held an interest in another residence and must satisfy occupancy requirements.

Prior to 1 August 2011, a duty concession was also available for the transfer, or agreement for the transfer, of a home (home concession). Like the first home concession, occupancy requirements applied. However, the home did not need to be the person’s first home.

With the reinstatement of the home concession, contracts entered into on or after 1 July 2012 by home buyers will be eligible for the transfer duty home concession when purchasing a home if they meet the concession conditions.

The home no longer has to be the first home of the home buyer, and can be new or one that has been previously occupied.

Where the concession applies, a concessional transfer duty rate of $1 for each $100 or part of $100 will apply to the first $350,000 of the consideration or value of the home. Duty at the general rates will apply to any remaining part of the consideration or value.

The transfer duty rate structure and the phasing-out arrangements for the first home concession that existed before 1 August 2011 will also be reinstated for contracts entered into on or after 1 July 2012.

These changes will reinstate the transfer duty arrangements for homes that existed before the abolition of the home concession on 1 August 2011.

The occupancy requirements for both the home and first home concession are unchanged, namely, the applicant must occupy the home as their principal place of residence within one year of the transfer. Also, the applicant may lose the concession if they sell or lease part or all of the home before moving in or within a year of moving in.

Home buyers will be able to apply for the concession by lodging with the Office of State Revenue the relevant transfer documents together with a completed concession claim form, which will be available from the Office of State Revenue website at www.osr.qld.gov.au. Alternatively a self assessor, such as a solicitor acting for the home buyer, can claim the concession on their behalf.

The necessary amending legislation will also ensure that the home concession applies only in relation to contracts and transfers entered into on or after 1 July 2012. The concession will not be able to be claimed where a contract replaces another contract entered into before 1 July 2012 or is made on the exercise of an option to purchase granted before that date or another arrangement is made with the sole or main purpose of deferring the making of the transfer or agreement for the purchase of the home until after 1 July 2012.

Information on eligibility, duty rates and how to apply can be obtained by contacting the Office of State Revenue on 1300 300 734.

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