DECEMBER 2008:
- First Home Owner Changes
- Land tax threshold increased for 2009
- 2008 State Mini Budget
- Changes for the Government’s Regional Planning Panels
First Home Owner Changes
First Home Owners Grant
As of 14 October 2008 the ‘First Home Owners Grant’ has increased to $14,000 for second hand dwellings and $21,000 for new dwellings. The increase only applies to contracts entered into between 14 October 2008 and 30 June 2009. All standard eligibility requirements must still be met. The increased grant is not applicable to any contracts rescinded and re-entered solely to take advantage of the increased grant.
The NSW State Government further announced within its most recent mini-budget an additional supplement of $3,000 towards new dwellings. The additional supplement applies only to new contracts entered into between 11 November 2008 and 10 November 2009 and similar restrictions apply.
The NSW State Government has also announced measures to cap the Grant at $7,000 from 1 July 2009 and also limit the eligibility criteria to homes valued under $750,000 (subject to Federal approval).
First Home Saver Accounts
1 October 2008 saw the commencement of the Federal Governments ‘First Home Saver Account’ incentive scheme. The scheme is aimed at assisting first home owners save for a deposit towards their first residential home and provides a number of incentives and conditions.
Eligibility
In order to be eligible for a ‘First Home Saver Account’ you must:
- be aged between 18 years and 65 years;
- have a valid Tax File Number; and
- have never owned a residence in Australia used as your primary residence (this does not include investment properties).
You may only open one account per individual, however, some exceptions do apply.
Incentives
- when you open an account you must make a minimum contribution of $1,000 in four financial years (not necessarily consecutive years) while the account is open;
- you can contribute as much or as little each year as you like, however, there is a maximum amount that the account may hold over the life of the account which is currently $75,000 for the 2008-09 financial year (indexed each year);
- the Federal Government will contribute 17% on top of your contributions each year up to a maximum of $850 during the 2008-09 financial year (indexed each year);
- all costs and taxes are paid by the service provider so you do not incur any additional costs, expenses or taxes.
When ready to buy
You can withdraw the funds in your account at any time (tax free) provided:
- you withdraw all the funds and close the account;
- you put the payment towards the costs of buying or building your first home within six months of withdrawing the funds;
- you live in your house as your main residency for at least six months starting from either the settlement date or the building completion date.
What if you do not buy anything or reach 65?
If you choose to close your account without putting the proceeds towards your first home all of the funds must be deposited into your nominated Superannuation Account. Generally the funds cannot simply be withdrawn.
When you reach the age of 65 your provider must close your account as you will no longer be deemed eligible for an account. All of the funds of your account can be either paid out to you or transferred into your nominated Superannuation Account.
Written by Emanuel Oros, Paralegal
Land tax threshold increased for 2009
The Valuer General has determined that the land tax threshold for 2009 is $368,000.
The Valuer General used the following indexed amounts to determine the average of indexed amounts for the 2009 tax year:
| Tax Year | Indexed Amount |
|---|---|
2007 |
$356,000 |
2008 |
$369,000 |
2009 |
$380,000 |
Written by Emma Napoli, Associate
2008 State Mini Budget
On 11 November 2008 the NSW Government issued a financial statement, introducing the following measures:
- Land tax
From 1 July 2009 a new premium land tax marginal rate of 2% will apply to tax payers who have land holdings above $2.25 million (Premium Threshold). The Premium Threshold will be indexed for the 2010 tax year and following tax years.
The tax free threshold for 2009 is $368,000 and land holdings below the Premium Threshold will remain subject to the current 1.6% tax.
- Nominal duty
Currently nominal duty of either $2 or $10 is payable on a number of documents, such as duplicates of contracts and collateral mortgages. From 1 January 2009, current nominal duty of $2 will increase to $10 and current nominal duty of $10 will increase to $50.
Duty on the execution of certain trust documents will increase from $200 to $500.
- Deferrals
Abolition of transfer duty on non-land business assets has been deferred from 1 January 2009 to 1 July 2012.
Mortgage duty on owner occupied housing and investment housing has already been abolished but the abolition of remaining mortgage duty has been deferred until 1 July 2012.
- Landholder duty
Currently ‘Land Rich’ duty is paid on any acquisition of a ‘significant interest’ of a private company, private unit trust or wholesale trust, where more than 60% of that entities property is land.
The ‘Land Rich’ duty will be replaced by the ‘landholder’ model. Under the new model, the purchase of a significant parcel of shares or units in any entity that owns land above a threshold value is subject to transfer duty as if there is a direct purchase of land.
- Parking levies
From 1 July 2009, off the street, non residential parking will increase per year from:
- $950 to $2000 in Sydney, North Sydney and Milsons Point business districts; and
- $470 to $710 a year in St Leonards, Chatswood, Parramatta and Bondi Junction business areas.
Written by Vincent Tripodina, Graduate-at-Law
Changes for the Government’s Regional Planning Panels
Regional Planning Panels to be expanded
On 6 November 2008, NSW Planning Minister Kristina Keneally announced new changes for the Government’s Regional Planning Panels (JRPPs) and Planning Assessment Commission (PAC). The changes will depoliticise the planning process and deliver to the NSW public a more transparent, accountable and certain planning process. In addition more planning decisions will be delegated to independent expert panels.
Projects of major significance will be considered by a panel consisting of both State Government and Local Council representatives and community input will continue to be sought on the decisions made. Most coastal projects listed in Schedule 2 of the Major Projects SEPP will be removed and will now be determined by either Local Councils or JRPPs depending on their value.
These reforms will ensure that proposals will be assessed on their planning merits and not on extraneous political issues.
Joint Regional Planning Panels (JRPPs)
The JRPPs will come into operation from mid 2009 and will consist of the following members:
- three State Government appointed members; and
- two Council appointed members from the local area where a development application (DA) has been made.
One of the features of the changes is the reduction in the threshold for assessment of residential, mixed use and commercial DAs by JRPPs from the previously proposed $20 and $50 million to $10 million. The $5 million threshold for Crown development and private infrastructure has been retained with a further category of ecotourism development added. These new thresholds will commence on 1 February 2009 and relevant projects will be determined by the PAC in the interim until the JRPPs are formed and commence operation.
The changes to the planning panels will see about 90% of major project determinations for coastal and urban development made by the PAC and JRPPs. This equates to an increase from 180 to approximately 380 projects a year being assessed by regional panels, with the overwhelming majority of DAs still assessed by Councils. Local Councils will continue to assess projects and consult with the community as they currently do, however instead of making a recommendation to Councillors, the Council will make its recommendations to a JRPP for determination.
Planning Assessment Commission (PAC)
The PAC has already commenced operation and will consist of a property industry representative as well as two people with environmental and community consultation expertise. The PAC will source members to include a wider range of skills, including property development, environmental assessment and community consultation making the PAC the major NSW Planning advisory body.
The PAC will play a significant role in depoliticising the planning system by ‘standing in the shoes of the Minister’ and determining all development applications where the Minister’s power is delegated to the PAC. This delegation will occur in the following cases:
- where the applicant has made a reportable political donation over $1000 in the past two years;
- where the project is in the Planning Minister’s electorate;
- where the Minister for Planning has a pecuniary interest in the project.
The reforms build on the Government’s legislation, already in force, which requires proponents of development applications to declare political donation over $1000 which have been made at any point in the two years prior to lodging. This will ensure that the DA process will be more transparent and applicant’s will have a ‘fair go’ when seeking approval. Nevertheless, it is unclear whether this will arise where an ‘associate’ of the applicant has made donations or a person other than the applicant with a financial interest in the project has donated.
The Department of Planning will still maintain a role in the decision making process. The Department will conduct the assessment of the DA and make recommendations to the PAC or Minister for determination. The PAC (and Minister) will then have 14 days to make a decision from the date that they receive the assessment report and recommendation from the Department. If not decided within this timeframe, they must make reasons publicly available.
Written by Mike Steell, Solicitor
