Duties Fact Sheet - First Home Owner Rate

Fact sheet
First home buyers may be eligible for the first home owner duty concession.

A person who

  • qualifies for a first home owner grant or 
  • would have otherwise qualified for a grant if consideration had been paid, or for the purchase of an established home or
  • is an Indian Ocean Territory resident acquiring their first home

may be entitled to the first home owner rate (FHOR) of duty on the transfer, or agreement to transfer (i.e. the contract for sale), in respect of the acquisition of the home or vacant land.

A person who is not entitled to this concessional rate because the value of the home or vacant land exceeds the specified thresholds may be eligible for the residential rate of transfer duty. See the Transfer of Residential Land fact sheet.

Eligibility

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Eligibility is aligned with the requirements under the First Home Owner Grant Act 2000 (‘FHOG Act’).

A transfer, or an agreement for the transfer, of a home or vacant land upon which a new home has been or will be built may qualify for the FHOR of duty where

  • the purchaser(s) or transferee(s) is/are eligible for a grant or
  • the purchaser(s) or transferee(s) become(s) a person to whom a grant would be, or would have been, payable in relation to
    • the purchase of an established home
    • a property, had consideration been given for the transfer of the property or
    • the purchase of a first home by residents of the Indian Ocean Territories and
  • the unencumbered value of the land, or the land and home, to which the grant relates does not exceed the dutiable value thresholds set out below.

See the First Home Owner Grant fact sheet for more information.

Thresholds

The dutiable value threshold limits apply to the whole value of the home or vacant land being transferred, not to the value of the person’s interest in the property that is being transferred.

Home

To be eligible for the FHOR of duty, the unencumbered value of the home must not exceed $530,000.

  • If the dutiable value of the home does not exceed $430,000, no duty is payable.
  • If the dutiable value of the home exceeds $430,000 but does not exceed $530,000, duty is payable at a rate of $19.19 for every $100, or part of $100, by which the dutiable value exceeds $430,000.

Vacant land

To be eligible for the FHOR of duty, the unencumbered value of the vacant land must not exceed $400,000.

  • If the dutiable value of the land does not exceed $300,000, no duty is payable.
  • If the dutiable value of the land exceeds $300,000 but does not exceed $400,000, duty is payable at a rate of $13.01 for every $100, or part of $100, by which the dutiable value exceeds $300,000.

Foreign transfer duty

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If a first home owner purchases a property and the first home owner rate of duty is applied to the transaction, foreign transfer duty may apply if the purchaser is a foreign person. This means that although the transaction may not attract any transfer duty, it will still be chargeable with foreign transfer duty on the dutiable value of the foreign person’s interest in the property.

Example

Kate and her de facto partner Simon are first home buyers and enter into an agreement, as joint tenants, to purchase a home for $400,000.

Kate is an Australian citizen and Simon is a foreign person.

Kate and Simon are eligible for the first home owner rate of duty on the agreement to purchase the property. There is no transfer duty payable on the contract as it is below the first home owner rate thresholds.

The foreign transfer duty chargeable on Simon’s 50% joint tenant interest in the property is $14,000 ($200,000 x 7 per cent).

How to apply

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A person who applies for an assessment at the FHOR of duty will be subject to the requirements, eligibility criteria and obligations set out in the FHOG Act.

How to apply

  1. Lodge Form F-FHOG1 ‘FHOG Application and/or Pre-approval for the First Home Owner Rate of Duty’ with an approved financial institution or RevenueWA.
  2. RevenueWA will send you a letter of approval together with Form FDA7 'First Home Owner Rate of Duty' if you meet the criteria.
  3. Submit the transaction record (e.g. contract for sale and/or transfer of land) together with the completed Form FDA7 'First Home Owner Rate of Duty' and Form FDA41 ‘Foreign Transfer Duty Declaration’ to your settlement agent (where applicable) or directly to RevenueWA if you are conducting your own settlement.

How to apply for a reassessment if duty has been paid

If the transaction has previously been charged with duty at the residential or general rate of duty, Form FDA7 'First Home Owner Rate of Duty' and the document on which the original duty stamp has been printed or to which the Certificate of Duty is attached (e.g. contract for sale or offer and acceptance) must be lodged at RevenueWA for reassessment of the transaction at the FHOR of duty.

You must also provide Form FDA41 ‘Foreign Transfer Duty Declaration’ if this was not submitted when the transaction was initially lodged. A refund of any overpaid duty will be made.

Time limit to make an application for reassessment

There may be circumstances where, at the time you are required to lodge the transaction record (document), you will not be in a position to lodge an application for the FHOR of duty. In such circumstances the transaction record will initially be assessed at the general rate of transfer duty or, if eligible, at the residential rate upon application.

An application for the FHOR of duty must be made within the later of

  • 12 months after the completion date of the transaction the subject of the application or
  • three (3) months after payment of the grant (if you were eligible to be paid a grant).

The completion date is

  • in the case of a transaction for a home – the date when the purchaser becomes entitled to possession of the home and has been registered on the Certificate of Title to the land on which the home is situated or
  • in the case of a transaction for vacant land upon which a home is to be built (either by a contract to build or by an owner builder) – the date when the home is ready for occupation.

A person is not entitled to apply for a reassessment at the FHOR of duty after the relevant time limit specified above.

Shared equity arrangements

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A shared equity home owner may qualify for the FHOR of duty when purchasing either some or all of the interest in their home with or from the Department of Housing.

A further transfer of an interest in a shared equity home may also qualify for the FHOR of duty. For more information please refer to Form FDA9 'Reduction of Transfer Duty for a Further Concessional Transaction'.

Your obligations

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An assessment at the FHOR of duty is subject to the transferee meeting the eligibility criteria and conditions for the grant, whether or not the transferee actually receives a grant.

The transferee must notify the Commissioner of State Revenue within 30 days of the date it becomes apparent that any eligibility criteria will not be met.

For example, if the residence requirement is not met, written notification of that fact must be made to the Commissioner within 30 days of the expiration of the residency requirement, or on the date it becomes apparent that the residency requirement cannot be fulfilled, whichever is earlier.

If for any reason a person is required to repay a grant, then a transaction that has been assessed at the FHOR of duty will be reassessed at the appropriate rate of duty.

Penalty

If an application contains false or misleading information, the person or persons commit an offence under the Taxation Administration Act 2003 for which the maximum penalty is $20,000 plus three times the amount of tax that was or might have been avoided.

Documents

Page reviewed 1 July 2020
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