My client received a $7,000 first homeowners grant (FHOG) on his first principal place of resident property purchase in 2010. This property was purchased for $700,000, and full stamp duty was paid as there was no stamp duty concession at the time for first-time buyers (just the FHOG grant). Since this time, he has married, and his wife owns no property in her name and is looking to purchase a property for 600k solely in her own name. She is a permanent resident (not an Australian passport holder). Is she eligible to receive the first home buyer duty concession?
https://www.sro.vic.gov.au/first-home-owner/apply-first-home-buyer-duty-reduction
The SRO website outlines – “you will not be entitled to the first home buyer duty benefits if you or your partner has previously received the benefit of the exemption or concession.”
As my client did not receive the stamp duty concession but did receive the FHOG in 2010, will his spouse still be eligible for the stamp duty concession?
The SRO website outlines the first home buyer duty exemption or concession may be available if:
You enter into a contract of sale to buy your first home on or after 1 July 2017.
Your home has a dutiable value of:
$600,000 or less to receive the first home buyer duty exemption,
$600,001 to $750,000 to receive the first home buyer duty concession.
All the purchasers of the property meet the First Homeowner Grant eligibility criteria, and
at least one purchaser satisfies the residency requirement.
The exemption or concession is only available to you once. If you or your partner has received the benefit of this exemption or concession previously, you cannot receive it again.
All criteria above will be met, but we are looking for clarity on the final point.
Also, if my client’s spouse was to purchase the property in her name but the loan to purchase the property is in my client’s name, can interest be deducted as an expense?
Answer
The answer would appear to be no… more so as it would appear that there is no intention for the wife to live in the property given the enquiry about the deductibility of interest.
If there is any doubt, there is no harm in outlining the situation to SRO VIC to seek an answer.
In the event the husband’s name goes on the loan, and the loan proceeds are used 100% to purchase an income-producing property, then under the “use” test… there shouldn’t be an issue in claiming the interest.