If you have recently built a home with your partner, or bought a brand new home, and you have now separated, there is a chance that you will need to pay your property grants back.
Below we explain when you need to pay your property grants back, when you don’t need to, and what else you should know to protect yourself.
If you are selling the property
If you are selling the property for which you received property grants, then there is a high chance that you will need to pay back those grants. The rules for property grants are as follows:
- New Home Grant
- If you purchased a home complete and ready for occupation or an off the plan purchase you are not required to pay back the grant.
- If you purchased vacant land with the intention to build a dwelling:
- But did not commence construction within 26 weeks of settlement then you must repay the grant; or
- If you completed construction then you will not be required to pay back the grant.
- First Home New Home Stamp Duty Exemption/Concession
- If you purchased vacant land with the intention of building a dwelling; or
- If you bought a new home that had not been lived in previously, then:
- At least one purchaser must have occupied the property for a continuous period of 6 months in the first 12 months. If this has been achieved then the stamp duty exemption/concession does not need to be paid back.
- If you have not commenced construction or neither purchaser has lived at the property for the required period then the exemption/concession must be paid back on or prior to the settlement of the sale.
- First Home New Home Grant
- The guidelines above for the Stamp Duty Exemption/Concession are also applicable to the grant.
If one of you is keeping the property
If one of you is going to keep the property and buy the other out, there is a chance that you will not need to pay back the grant money that you have received.
In order to avoid paying back any stamp duty concession or grant received on your Property you must meet the eligibility and residence requirements, which are set out below:
- New Home Grant
- If you purchased a home complete and ready for occupation or an off the plan purchase you are not required to pay back the property grant.
- If you purchased vacant land with the intention to build a dwelling:
- But did not commence construction within 26 weeks of settlement then you must repay the grant or request an extension to meet the requirements of the grant which would avoid the need to pay back the grant; or
- If you completed construction then you will not be required to pay back the grant.
- First Home New Home Stamp Duty Exemption/Concession and Grant
- Either purchaser must have lived at the property for a continuous period of 6 months within the first 12 months after settlement or completion of the dwelling.
What should be done from a Family Law point of view?
If you have separated and have property together, you should be entering into a formal property settlement. To read more about why, please click here.
In addition to providing you with protection and certainty in the future, a formal family law property settlement will also help the party who is going to keep the property avoid having to pay stamp duty on the transfer into their sole name.
A family law property settlement is also important if you have previously received property grants. Any settlement should cover who, out of the two of you, will be responsible for paying back the grants in the event that the conditions set out above are not complied with. If you are not keeping the house, and you are selling your share to your former partner, you may want any settlement to say that you will not be responsible for paying back the grants in the event that your former partner does not comply.
This will help both of you move forward into the next chapter of your lives with certainty.
If you would like more information about this, please contact our office to make an appointment.
