The new federal Family Home Guarantee announced by the Australian government provides single parents with dependents with the ability to purchase a family home with a deposit as little as 2% of the purchase price! We have summarised the important points of the Guarantee in this article for your reference.

From 1 July 2021, the Australian Government will provide 10,000 Family Home Guarantees over 4 financial years to help single parents purchase the following eligible properties:

• Existing house, townhouse or apartment;
• House and land package;
• Land and separate contract for building a home; and
• Off the plan apartment or townhouse.

The applicant must meet all the following criteria to obtain the Guarantee:

• Australian Citizen above 18 years of age – Permanent residents are not eligible;
• Single parent with at least one dependent child (meaning that the applicant is legally responsible for the day-to-day care, welfare and development of the child);
• Taxable income less than $125,000 per annum;
• Must be the only person on the loan and purchasing the property;
• Be the owner-occupier of the purchased property;
• Must not currently own any property; and
• Purchased property price must not exceed the thresholds for each state and territory：

However, applicants must be aware that purchasing a property with a 2% deposit will lead to a higher loan amount, meaning there are higher interest and principal repayments. If you want to apply for the Guarantee, it is recommended for you to seek financial and legal advice to ensure you fully understand the implications and have the financial capabilities to afford the repayments.

Single parents face a huge challenge to both support their family while also saving up for a family home, especially with the current increasing property prices. Through the Family Home Guarantee and the proposed duty reform (details of duty reform), the Australian Government has shown their commitment to helping these vulnerable people and maintaining affordability of property in Australia for owner occupiers. If you are eligible for the Family Home Guarantee, you may also obtain other benefits and concessions such as the First Home Owner Grant or Stamp Duty concessions.

If you would like to enquire about your eligibilty for any grants or benefits to purchase property, please do not hesitate to contact us at any time at 02 9267 4988 or vincent.hui@sunlaws.com.

The NSW government in June 2021 announced further updates to the much anticipated reform of stamp duty and land tax in NSW, revealing new insight on how the reform might operate after it is enacted.

Currently, all purchasers of property need to pay stamp duty on the purchase of property, and annual land tax based on their current landholding. The NSW government is proposing to replace stamp duty and land tax with an annual property tax calculated on each property in the reform.

The proposed reform gives all purchasers of property the choice between the following:

• Pay Stamp Duty on their purchase, and land tax on their property; or
• Pay the annual property tax for the property.

Once a property is subject to the annual property tax, all future purchasers will need to pay the annual property tax. The option to choose will also eventually be removed and all properties will have to pay the annual property tax.

In light of the proposed reform, many first home purchasers will be wondering what benefits they will be receiving as stamp duty concessions will no longer be valid. The NSW government has devised a replacement of the first home owner stamp duty concessions with a First Home Owner Grant of $25,000. This Grant amount is approximately the stamp duty for property value of $650,000, which is currently $24,585. Based on the current scheme, first home buyers obtain more savings from the stamp duty concession when they purchase property with a higher value than $650,000. However, after the First Home Buyer stamp duty concession reverts to the cap of $650,000 on 31 July 2021, first home buyers actually receive more benefits as regardless of the property price they purchase, they can still receive the full $25,000 grant.

The combined advantage of no longer have to pay stamp duty while obtaining $25,000 from the Grant helps first home buyers to purchase their first homes with less money than what is required before.

The proposed reform shows the NSW government’s commitment to helping home owners purchase property by removing the huge upfront barrier of stamp duty. Furthermore, the annual property rates of tax for home owners are much lower than investment properties and it was calculated to take around 18 years for an owner occupier’s property tax to exceed the corresponding stamp duty! With additional consultations on the way, we look forward to seeing further changes implemented by the reform to further make property in Australia more affordable.

A further update will be provided once the details have been confirmed for you to keep up to date with the latest laws. If you have any questions regarding the above, please do not hesitate to contact us at any time at 02 9267 4988 or Vincent.hui@sunlaws.com. Thank you!

The First Home Buyer benefits are a once in a lifetime opportunity for all Australians. Every Australian and residents are able to obtain on their first purchase in NSW a grant of $10,000.00 and a concession on stamp duty, providing huge savings to enable young Australians to fulfill their dreams of owning a property.

However, sometimes due to the circumstances, certain individuals are unable to obtain their first home benefits.

One such client, Clare, approached us to purchase a property under her own name. She had been separated from

her husband for a year, but the divorce application has yet to be lodged. She had found the perfect apartment of her dreams to start over fresh from her relationship. However, as her husband had previously bought property in Australia, she was unable to obtain First Home Buyer concession on stamp duty.

Based on her situation, we drafted a concise and detailed submission to Revenue NSW, and we were able to obtain a full refund of the stamp duty to Clare successfully.

Whenever you have a situation when you are unable to obtain a benefit due to your circumstances, it is always recommended for you to contact and explain your situation to a solicitor. You can always contact us at Sun Lawyers to review your situation and advise if we could make a submission on your behalf. Our lawyers are experienced in drafting letters to sympathetically describe your situation while making strong arguments to help you obtain the benefits you deserve.

If you have any further queries regarding obtaining further benefits, do not hesitate to contact us at Vincent.hui@sunlaws.com or 02 9267 4988.

When the Covid-19 pandemic hit Australia in 2019, many people were not prepared and was hit with unexpected fines or penalties by the governmental taxation agencies. With the closure of borders, foreigners were unable to re-enter the country due to no fault on their own. However, they would still be hit with fines or penalties for contravening taxation laws.

One such case can be explored below:

A client, Cindy, has previously purchased a property in Sydney with approval from the Foreign Investment Review Board, and lived in the property in accordance with the terms of the FIRB approval.

However, due to the border closure, Cindy was unable to return to Sydney and her property was vacated for a year. Cindy was now liable for a vacancy fee up of $11,500.00.

After contacting us, our experienced lawyers used the relevant laws to devise a suitable strategy for Cindy’s situation. We were able to apply for an exemption of the vacancy fee under the Foreign Acquisitions and Takeovers Regulation 2015. By writing a submission to the Australian Taxation Office detailing the situation and a comprehensive defence of our client’s position using the regulations, we fought for an exemption for our client from the Australian Taxation Office regarding the vacancy fee.

Disputes with the Governmental Departments

When faced with a notice or requisition from governmental departments such as the revenue or taxation office, many people choose not to contest the issue and pay the fine or penalty.

However, you could always contact us to review the requisition or notice, and we will be able to assess if there was a possibility to overturn the decision in your circumstances. Our lawyers are experienced in drafting letters to sympathetically describe your situation, and make a sound argument for why the decision should be overturned.

If you have any further queries regarding disputes with the taxation or revenue office, do not hesitate to contact us at Vincent.hui@sunlaws.com or 02 9267 4988.

Sorry, this entry is only available in 中文.

Sorry, this entry is only available in 中文.

The Victoria pre-budget announcement came hot on the heels of the Federal Budget announcement, introducing several updates that would affect landholdings in Victoria.

The budget announcements reveal the following changes which will begin on 1 January 2022:

• Land Tax

The Land Tax rate for taxable landholdings exceeding $1.8 million will increase by 0.25%, and the rate for taxable landholdings exceeding $3 million will increase by 0.30%.

• Stamp Duty

Premium Stamp Duty rates for property transactions with a value above $2 million has been increased to $110,000 plus 6.5 per cent of the dutiable value in excess of $2 million.

• Windfall Gains Tax

Windfall Gains Tax of up to 50% for windfalls above $500,000 will be taxed for Developers and speculators.

Impact of the changes

The biggest impact of the changes would be on developers and investors of property, as they would be charged more tax on acquiring or holding onto property with a high value. Treasurer Tim Pallas emphasises that everyone needs to pay their fair share to support Victoria’s economic recovery, and the budget aimed to make those who has the capacity and making substantial profits to contribute more to society.

The increases in taxes will ultimately raise an estimated $380 million each year to be reinvested into the community, giving schools, hospitals and other community services the support they need.

Although these changes which may slow down property development and divert investments away from Victoria in the recovering Covid-19 economy, the Government is showing their confidence that Victoria is still a highly attractive investment destination even with the increases in taxes.

The changes do not affect residential land and the government is still supportive of local owner occupiers will not be affected by the increases. However, Local Victorians with substantial current landholdings need to be aware if the added taxes will be applicable to them.

• If you have any queries regarding property in Victoria, please do not hesitate to contact us at any time at Vincent.hui@sunlaws.com and 02 9267 4988.

In the budget announcement on 11 May 2021, the Australian government has introduced new measures to assist Australians to afford the purchase of their property.

The new Family Home Guarantee acts similarly to the First Home Loan Deposit Scheme where the government acts as a guarantor to single parents to allow them to purchase a property with as low as a 2% deposit! Successful applicants are also exempt from lenders mortgage insurance which usually applies to borrowers with low deposits. Over the next four years, 10,000 guarantees will be made available for the single parents to apply.

Who is eligible?

From 1 July 2021, the Family Home Guarantee for will be available to single parents who meet the following criteria:

1. Australian Citizen with child dependants;
2. Annual income of less than $125,000.00;
3. Owner-occupier of the purchased property; and
4. Build a new home or purchase existing home.

Buyer Beware!

However, applicants will also need to be aware of the following drawbacks:

1. While being able to afford houses easier, only paying a 2% deposit on the property means that the applicants will be paying interests on a higher amount of mortgage.
2. At the same time, applicants will need to prove that they will have the financial capabilities to afford the increased amount in order to be successful in their application.

The budget provides only a general outline of the grant, and the exact details of the guarantee may be subject to change when confirmed later on by the government.

Other announcements in the budget includes an increase in First Home Loan Deposit Scheme spots for purchases of new homes by 10,000 spots and maximum super voluntary contributions have been increased from 30000 to 50000.

We look forward to seeing the budget announced by the states to see if there are any further grants or incentive provided by the state governments.

If you have any queries regarding the above or about purchasing property in Australia, please do not hesitate to contact us at Vincent.hui@sunlaws.com or 02 92674988 at any time.