Northern Territory Second Reading Speeches

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FIRST HOME OWNER GRANT AMENDMENT BILL 2004

Bills presented and read a first time.

Mr STIRLING (Treasurer): Madam Speaker, I move that the bills be now read for a second time.

The bills propose amending the First Home Owners Grant Act and Stamp Duty Act to put in place a number of measures to improve the integrity and the administration of the First Home Owner Grant, the Stamp Duty First Home Owner concession and principal place of residence stamp duty rebate.

Turning first to the First Home Owner Grant Amendment Bill, which seeks to make several changes to the First Home Owner Grant Act, by way of background the First Home Owner Grant Act provides a $7000 grant to first home buyers. The grant was introduced across Australia at the same time as the GST to compensate first home buyers for the initial cost of buying your home because of the GST.

The Commonwealth, states and territories agreed to introduce the uniform scheme in accordance with legislation administered by states and territories. To maintain this consistency between the legislation of the states and territories, the first three changes proposed to the First Home Owner Grant Act have been or will be adopted in similar form by all states and territories.

The first of the proposed changes introduces a minimum age of 18 years for First Home Owner Grant applicants. I announced this change on 30 October 2003 in response to reports that very young children were being used to exploit the scheme in other states. While the scheme does not appear to have been abused in this way in the Territory, the minimum age limit has applied since 10 November 2003 to safeguard the scheme’s integrity.

Children under 18 years of age will still be able to qualify for the grant where they purchase jointly with a person who is over 18 years of age, or if they show that they are genuinely buying a home for themselves. In the instances where this may apply include where a 17-year-old child has saved sufficient funds, through working, for a deposit on a home and a bank has provided them with finance to purchase the home; or a disabled child has obtained funds from compensation payment to buy a home which has been modified to suit his or her medical needs, and lives in the home with his or her parents who act as the child’s carers.

Currently, the only residence requirement for First Home Owner Grant recipients is that they live in a home as their principal place of residence within 12 months of buying or building a home. However, the legislation does not provide any rules to assist people to determine when they have satisfied the requirement to occupy their home as their principal place of residence, and this has caused difficulties for both grant recipients and the Commissioner of Taxes.

To overcome these difficulties it is proposed to require First Home Owner Grant recipients to reside in the property for which they have received the grant for a continuous period of at least six months. This period of residence must commence within 12 months of buying or building the home for which the grant is received. This amendment seeks to provide a simple rule to enable people to determine when they have met the residence requirements. This rule will apply across Australia.

It is also recognised that people’s circumstances may change once they have moved into the home, which may not enable them to live there for the full six months. Where a person’s reason for not living in their home for at least six months is legitimate, a shorter residence period can be approved. Examples of where this may apply are where a grant recipient is transferred to another town or city for their current job; a home of a grant recipient is damaged or destroyed to the extent that it is uninhabitable; or a grant recipient’s ill health requires them to be hospitalised.

The third proposed change relates to circumstances in which a person has been required to repay the grant because they did not meet the residence requirements under the First Home Owner Grant Act. Currently, such a person is disqualified from obtaining the grant for a subsequent home that they buy, even though they have repaid the previous grant that they were not entitled to. This is a harsh penalty in many circumstances, and it is proposed to remedy this by allowing a person to qualify for a subsequent grant, as long as they have repaid the previous grant and any penalties and interest owing on that amount. This change is also being adopted across Australia, but to varying degrees.

The bill also proposes to charge interest on First Home Owner Grants that are to be repaid, and on any penalties that are not paid on time. The proposed interest rate would be equivalent to the average yield of 90-day bank accepted bills published by the Reserve Bank of Australia for the month of May immediately preceding the financial year in which interest is applied, plus 7%. Other Territory acts use a similar rate, as does the Commonwealth and other states.

The commissioner may remit any interest in appropriate circumstances. For instance, the commissioner may remit the interest where a person is genuinely unaware that they were not entitled to receive the grant, such as where their spouse had previously owned a home but did not advise them of this.

Another of the proposed amendments will alter the current offence under the act for knowingly making a false statement, such that it will be an offence to make a false statement, irrespective of whether it is deliberate or not. To alleviate concerns that a person may be unjustly prosecuted for making a false statement, a defence will be available to a person if they can show that the false statement was made inadvertently or through ignorance. This change has been proposed on legal advice. That advice indicates that it can be very difficult to prosecute a person under the current provision, even though the person deliberately intended to defraud the Territory by making a false statement.

Minor changes are also proposed for the First Home Owner Grant Act to clarify that a charge created under the act is an overriding statutory charge under the Land Title Act, and ensure that all grant recipients have 12 months after a transaction is completed to occupy their home.

Turning to the Stamp Duty Amendment Bill, which seeks to mirror the proposals in the First Home Owner Grant Amendment Bill, to introduce from 10 November 2003 a minimum age limit of 18 years for stamp duty first home owner concession applicants, requiring applicants for the stamp duty first home owner concession and principal place of residence stamp duty rebate to reside in the home for a minimum period of six months, and to not disqualify a person from obtaining the first home owner concession for a home that they purchased, even though they may have obtained a previous concession that they were not entitled to.

The commissioner may approve a lesser residency period and pay the concession to applicants under 18 years of age for similar reasons to those proposed for the First Home Owner Grant.

Finally, the bill also proposes a change to the stamp duty first home owner concession to ensure that a recent change made be the Law Reform (Gender, Sexuality and De facto Relationships) Act does not inadvertently result in de facto couples being able to claim the concession for more than one home.

The changes proposed in both bills will operate from 1 July 2004, other than the clarifying of statutory charges under the Land Title Act which will operate from the day of commencement the Land Title Act, being 1 December 2000; the minimum age limit which will operate from 10 November 2003; and the change in response to the Law Reform (Gender, Sexuality and De facto Relationship) Act which will operate from the date that the relevant changes under that act take effect.

Madam Speaker, I commend the bill to honourable members.

Debate adjourned.

 

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