First Home Owner Grant (FHOG) Cap
Introduction
The Western Australian government has enacted legislative amendments to the First Home Owner Grant Act 2000 regarding the introduction from 1 January 2010 of a cap on the total value of properties (i.e. total value of home and land) considered to be eligible for the FHOG.
Eligibility to the Grant
The First Home Owner Grant cap applies to all eligible transactions in Western Australia that are made on or after 1 January 2010.
Eligible Transaction - The eligible transaction date is established by the type of transaction and has been determined to be as follows:
- for Established, New Home and Off the Plan – the date when the contract is made; and
- for Contract to Build – the date when the building contract is made; and
- for Owner Builder – the date when laying the foundations for the home begins.
Cap Amount - The cap amount applies to all eligible transactions entered into on or after 1 January 2010 and has been established as follows:
- For a home south of the 26th parallel, the total value of the property (i.e. total value of the home and land) does not exceed $750,000; and
- For a home north of the 26th parallel, the total value of the property (i.e. total value of home and land) does not exceed $1,000,000.
Total Value - The total value of a transaction can be determined by applying the following:
- Established, New Home or Off the Plan - the greater of the consideration for the contract to purchase, or the unencumbered value.
- Contract to Build – the total of the consideration for the contract to build, and the unencumbered value of the land.
- Owner Builder – the unencumbered value, at the date the transaction is completed, of the home (i.e. total value of the home and land).
Home - Is a building, affixed to land, that may be lawfully used as a place of residence and is, in the Commissioner’s opinion, suitable for use as a place of residence.
26th Parallel - The 26th parallel is a circle of latitude that is 26° south of the equator. As an example of location:
- Town of Kalbarri is south of the 26th parallel; and
- Town of Denham is north of the 26th parallel.
Related Party Transactions Requiring a Valuation
Related party transactions are considered to be circumstances where the applicant or their spouse/de facto partner is related to or associated with the vendor or builder. In such cases a valuation of the land and/or home may be required to establish a fair appraisal of the total value of the transaction (refer to table below for supporting documentation requirements).
A person is related to, or associated with, another party when:
- One is the spouse/de facto of the other; or
- They are related by blood, marriage or adoption; or
- They are a Shareholder or Director of the other party, being a company; or
- They are a Beneficiary of a trust for which the party is a trustee; or
- The transaction is otherwise not at arm’s length.
FHOG Cap requirements
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Type of Transaction
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Supporting Documention Required
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Eligible Transaction
(on or after 1 January 2010)
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Non-Related Parties
(Consideration)
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Related Parties
(Unencumbered)
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Established Property, New Home or Off the Plan
- The date when the contract to purchase is made
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- a copy of the endorsed Contract for Sale or endorsed Transfer of Land document that shows the dutiable amount; or
- a Valuer General's valuation requested by the Office of State Revenue
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Contract to Build
- The date when the contract to build is made
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For the land value:
For the construction value:
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For the land value:
For the construction value:
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Owner Builder
- The date when laying the foundations for the home begins
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For the land and construction value:
- a valuation, by a registered Licensed Valuer, less than 3 months old**; or
- a Valuer General's valuation requested by the Office of State Revenue
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For the land and construction value:
- a valuation, by a registered Licensed Valuer, less than 3 months old**; or
- a Valuer General's valuation requested by the Office of State Revenue
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* Estimated current market value at the time of the
eligible transaction. In the case of a Contract to Build – a comprehensive home building contract made on or after 1 July 2000.
** Valuation by a registered Licensed Valuer must be less than 3 months old from the date the eligible transaction is completed. In the case of an owner builder – completion is when the building is ready for occupation as a place of residence.
