Housing Construction Grant

The Housing Construction Grant (HCG) applied to eligible contracts entered into between 15 October 2012 and 31 December 2013

The Housing Construction Grant (HCG) was a grant of up to $8500, available to all home owners who purchased or built a new home, up to a market value of $450 000. For first home owners, the HCG was in addition to the First Home Owner Grant (FHOG).The HCG applied to:

  • a contract to purchase a new home entered into between 15 October 2012 and 31 December 2013 (inclusive);
  • a comprehensive home building contract for a new home entered into between 15 October 2012 and 31 December 2013 (inclusive) where the contract states that the building would be completed within 18 months of commencement or the building work was actually completed within 18 months of commencement;
  • a contract for the purchase of a new home off-the-plan entered into between 15 October 2012 and 31 December 2013 (inclusive) where the contract states that the building work would be completed on or before 30 June 2015 or the building work was actually completed on or before 30 June 2015; and
  • an owner builder where construction of the new home commenced on or after 15 October 2012 and before 1 January 2014.

Ex gratia relief was available for a new home in retirement villages or residential parks (see section on retirement villages and residential parks for more details).

The HCG was available to natural persons, companies and trusts. The new home could have been intended for occupation as a place of residence or investment. Unlike the FHOG, the new home did not need to be resided in, nor did the applicant need to be an Australian citizen or permanent resident.

There were no restrictions on the number of times a purchaser could apply for the HCG, regardless of whether a person purchased or built a new home alone or together with others. Previous recipients of a FHOG were also entitled to the HCG. However, where the HCG had been paid for the purchase or construction of a property, no further HCG could be paid in respect of that property, unless that previously paid HCG has been repaid.

Eligible New Homes in Retirement Villages

Ex gratia relief was available for a new home built in a retirement village where the buy-in price for the new home was less than $450 000.

The relief was paid, in all cases, to the owner of the retirement village land, where the eligible new home had been constructed as part of the retirement village.

See Revenue Ruling FHOG004 for more details.

Eligible New Homes in Residential Parks

Ex gratia relief was available to applicants who constructed a new home, or purchased a new transportable home, which was permanently affixed to land in a caravan or relocatable home park.

The relief did not extend to caravan parks placed on the land.The relief was paid to the resident or prospective resident who entered into a contract to purchase the relevant home (between 15 October 2012 and 31 December 2013). If the Commissioner of State Taxation (the "Commissioner) was satisfied that the new home had not been on-sold to a resident or prospective resident, the relief was paid to the owner of the residential park.

See Revenue Ruling FHOG003 for more details.

Market Value

The market value of a property included the market value of the land, the home and any other improvements.

Example 1

John bought a block of land in 2005 which is still vacant and is now valued at $200 000. John signs a comprehensive home building contract to build a new home on the land for consideration of $300 000. John will not be eligible for the HCG because the value of the home will be $500 000 which is above the value cap of $450 000.

NOTE: in the cases of a genuine farm the market value of the property was determined on the value of the home and curtilage area of that part of the land that constituted the site and curtilage of a home that was to be built on that site.

Consideration

Where the consideration for an eligible transaction was less than $8500 and applicants were not eligible for the FHOG for new homes the amount of the HCG would not exceed the consideration for the eligible transaction.

Example 2

Mike buys a new home from his father that is valued at $300 000 for a consideration of $1. As Mike is not eligible for a FHOG, the amount of the HCG will be $1.

Where the consideration for the eligible transaction was between $15 000 and $23 500 and the applicant was eligible for the FHOG and the HCG, the amount of the HCG will not exceed the difference between the consideration paid for the eligible transaction and $15 000.

Example 3

Jane buys a new home from her mother that is valued at $390 000 for consideration of $20 000. As Jane is eligible for both the FHOG for new homes and the HCG, the payment will be of $20 000 made up of a $15 000 FHOG and a $5000 HCG.

Property Value Cap

A property value cap applied. The property value cap was $450 000 based on the market value of the property purchased or built.

In the case of comprehensive home building contract the market value was:

  • the sum of the consideration for the building contract and the market value of the property on which the home was to be built as at the time the contract is made; or
  • where the consideration for the building contract was less than actual costs, the sum of the actual costs to build the home and the market value of the land on which the home was to be built as at the time the building contract is made.

NOTE: where a comprehensive home building contract included specific values for items that are not necessary for occupation of a place of residence, RevenueSA may have deducted these components from the consideration payable for the building work when determining the market value of the property. Some items that are considered not necessary for occupation as a place of residence include driveways and paving, landscaping, air conditioners and built in robes. See Information Circular 64 for more details.

In the case of an owner builder the market value was:

  • the market value of the property on which the home was situated at the time the home was completed and ready for occupation as a place of residence.

NOTE: in the cases of a genuine farm the market value of the property was determined on the value of the home and curtilage area of that part of the land that constituted the site and curtilage of a home that was to be built on that site.

How much was the HCG?

A HCG of $8500 was available for new homes where the market value did not exceed $400 000, and phased out for new homes with a market value between $400 000 and $450 000 at a rate of $17 for every $100 in excess of $400 000.

The table below outlines the maximum grant that was available in increments of $5000 increases over $400 000.

Market ValueHCG
Up to $400 000$8500
$405 000$7650
$410 000$6800
$415 000$5950
$420 000$5100
$425 000$4250
$430 000$3400
$435 000$2550
$440 000$1700
$445 000$850
$450 000 and aboveNil

It should be noted that if the consideration for the purchase a new home was less than $8500 (e.g. where a new home is inherited), the amount of the HCG paid did not exceed the consideration.

Who was eligible for the HCG?

Only one HCG is payable in relation to a particular new home. That is, where the HCG has been approved and paid in relation to a property, no further HCG was paid in relation to that property, unless that previously paid HCG has been repaid.

Where both the vendor of a new home and the purchaser of the new home were eligible to apply for the HCG in respect of that property, they needed to determine between themselves who applied for the HCG in respect to the property.

If RevenueSA receive applications from both the builder and the purchaser of a property, RevenueSA paid the HCG to the purchaser of the new home.

Further information is available in Revenue Ruling FHOG002.

What were the eligibility requirements?

Date of eligible transaction

Eligible transactions must have been entered into between 15 October 2012 and 31 December 2013 (inclusive)

Building Completion Requirements

  • If you entered into a comprehensive home building contract to build a new home:

The contract must state that the building work must be completed within 18 months of the construction commencing or the building work must actually be completed within 18 months of commencement.

If a completion date is not stated in the contract, you cannot receive the HCG until the building is ready for occupation as a place of residence.

  • If you entered into a contract to buy a new home off-the-plan:
The contract must state that the building work will be completed on or before 30 June 2015 or the building work must be completed on or before 30 June 2015.

You cannot receive the HCG until the building work has been completed and settlement has occurred.

The Commissioner may, in a particular case, extend the time within which an eligible transaction must be completed if the Commissioner considers there are proper reasons for doing so.

  • If you commenced building a new home as an owner builder:
Construction must be completed within 18 months of the construction commencing (date of the laying of the foundations). The construction completion date is the actual date the building becomes ready for occupation as a place of residence.

You cannot receive the HCG as an owner builder until the building is ready for occupation as a place of residence.

What Transactions were ineligible?

The following transactions were ineligible for the HCG:

1. Where the Commissioner is satisfied that the contract that formed the basis of the eligible transaction replaces a contract made before 15 October 2012 and that earlier contract was:
  • a contract for the purchase of the same home; or
  • a comprehensive home building contract to build the same or a substantially similar home;
2. Where the Commissioner is satisfied that a contract that formed the basis of an eligible transaction for the purchase (or purported purchase) of a new home does not constitute a genuine sale of the new home.

For these purposes, the Commissioner may take into account:

  • whether the parties to the contract are close associates;
  • whether the parties are otherwise not at arms length; or
  • such other matters as the Commissioner considers appropriate.

Two persons are considered close associates if:

  • one is a relative (spouse/domestic partner; parent or remoter lineal ancestor; son, daughter or remoter ancestor; or brother or sister) of the other;
  • they are related bodies corporate (within the meaning of the Corporations Act 2001 (Cwlth));
  • one is a body corporate and the other is a director, manager or officer of the body corporate;
  • one is a body corporate (other than a public company whose shares are quoted on a financial market) and the other is a shareholder in the body corporate;
  • one has a right to participate (otherwise as a shareholder in a body corporate) in income or profits derived from a business conducted by the other;
  • they are in partnership; or
  • one is a beneficiary under a trust or an object of a discretionary trust of which the other is a trustee.

Example 4

Tim has just built a new home which is valued at $400 000 and is yet to be occupied as a place of residence. Tim enters into a contract to sell 2.5% of his interest in the home to his wife for $10 000. The Commissioner becomes satisfied that the contract does not constitute a genuine sale of a new home and does not authorise payment of HCG.

The application of the above criteria was considered on a case by case basis taking into account all of the facts and circumstances.

When was the HCG paid?

The date the HCG was paid depended on whether you built or purchased, and if you are applied through an Approved Agent or through RevenueSA. The following table details the various scenarios.

How were applications made?

An application was required to be received within 12 months of the completion of the eligible transaction. A separate application was required for each eligible transaction.

A Housing Construction Grant Application could be submitted to an Approved Agent or RevenueSA together with required documentation.

Applications could be lodged with the financial institution providing finance as part of buying or building your home, if the financial institution is Approved Agent.

For ex gratia relief for a new home located in a retirement village or residential park, a Housing Construction Grant Ex Gratia Application - Retirement Village or Housing Construction Grant Ex Gratia Application - Residential Park was required to be lodged to RevenueSA (only) together with required supporting documentation.

Documentary evidence may have been required to substantiate claims for the HCG.

False Claims

There are substantial penalties for providing incorrect or misleading information in connection with an application for the HCG. RevenueSA conducts investigations and compliance checks to ensure HCG was only provided to entitled applicants

RevenueSA undertakes both random and targeted auditing of applications with the benefit of current and historical data held by commercial organisations and by state and territory agencies.

Further Information

The definition of terms page provides additional information.