FIRST HOME OWNER GRANT (HOUSING GRANT REFORMS) AMENDMENT BILL

Committee Stage

In committee.

Clause 1.

The Hon. G.E. GAGO: In the debate on this bill the Hon. Rob Lucas asked a number of questions, and I am able to provide the following responses. Clarity is sought on market value. Lutheran Community Housing suggested that it is critical that land value is taken out of the equation and that criteria is based on construction value. The same definitions of market value are being used in this bill that have been used in relation to the First Home Bonus Grant since June 2008 and in relation to the First Home Owner Grant Property Value Cap since September 2010.

Market value is a commonly used and accepted term and has not caused any issues with administration in the current First Home Owner Grant Act. Market value refers to the value of the home, including the land it is situated on, and the act sets out how these values are to be calculated. However, in most cases transactions are done at arm's length and the market value is equal to what the purchaser pays the vendor for the home and land.

Utilising the commonly used and accepted term of 'market value' ensures consistency for purchasers of homes, including those who purchase a completed new home, a house and land package or an off-the-plan apartment. I was also asked: if multiple houses are built on one title, will the grant apply to each of the four houses?

We have a situation whereby land is held on one title and it is proposed to build four houses on that land for the purposes of affordable rental housing or a mini development under the Retirement Villages Act. I am advised that there is nothing in the legislation that prevents more than one home being built on one block of land. The purpose of the housing construction grant (HCG) is to stimulate the construction industry, therefore, if a person decides to build more than one eligible home on the same block, they will be entitled to more than one HCG.

The amendment act will require that each residence is suitable for occupation as a place of residence. Obviously practical issues are involved in this for the owner; however, if they want to sell one of their homes to a third party, a land subdivision would be required. Nevertheless, the HCG will potentially be available for each home built in this scenario.

It should be noted that retirement village residents will generally not be eligible for the HCG because, generally speaking, residents in retirement villages do not actually own the residence that they occupy when they move into a retirement village: they are essentially purchasing a right to occupy, rather than purchasing the home.

Lutheran Community Housing also suggests that it is critical that legislation covers various entities, including companies, trusts, associations, etc. The HCG is available to non-first home buyers and to natural persons, companies and trusts. There is no limit on the number of grants available, other than only one HCG being payable per property regardless of whether a person purchases or builds a new home alone or together with others.

The HCG is available to any purchaser of a newly constructed home. A person can buy multiple homes and receive the grant for each of those homes because this measure is about stimulating the housing construction market.

The Hon. D.G.E. HOOD: Just a question of the minister: is the $400,000 cut-off amount house and land or just the value of the building?

The Hon. G.E. GAGO: I am advised house and land.

The Hon. D.G.E. HOOD: To be clear, if somebody was building a property in an inner-suburban area, for example, where the land would exceed that value, then they would not be eligible under this scheme?

The Hon. G.E. GAGO: I am advised that is correct.

Clause passed.

Clauses 2 to 15 passed.

Clause 16.

The Hon. G.E. GAGO: I move:

Page 7, line 32—Delete 'otherwise' and substitute 'other than'

Page 8, line 5—After 'remoter' insert 'lineal'

My first amendment relates to a small drafting error raised in the second reading debate by the member for Davenport. This amendment ensures that the definition of 'close associate' in proposed section 18BAB(6)(e) reads correctly to say 'other than as a shareholder in a body corporate'. The second amendment relates to another small drafting error that was raised also by the member for Davenport. This second amendment ensures that the definition of 'relative' in proposed section 18BAB(7)(c) applies to only lineal descendants, which will make the wording consistent with the definition in paragraph (b), which refers to lineal ancestors.

The Hon. R.I. LUCAS: Given, as the minister has acknowledged, that these issues were raised by the member for Davenport in another place, the Liberal Party supports the amendments.

Amendments carried; clause as amended passed.

Remaining clauses (17 to 20), schedule and title passed.

Bill reported with amendments.

Third Reading

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (15:33): I move:

That this bill be now read a third time.

Bill read a third time and passed.