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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2013-11-14 Daily Xml
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FIRST HOME AND HOUSING CONSTRUCTION GRANTS (ELIGIBILITY CRITERIA) AMENDMENT BILL

Second Reading

The Hon. M.F. O'BRIEN (Napier—Minister for Finance, Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (15:38): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

This Bill introduces legislative amendments to the eligibility criteria for the Housing Construction Grant (HCG).

Under the First Home and Housing Construction Grants Act 2000 (the Act) only one HCG is payable in relation to a particular new home.

In many cases, both a person who has a home built on their land (including an owner builder) and a subsequent purchaser of the same new home may be eligible for the HCG.

The Act allows the HCG to be paid to either party in recognition that the scheme was intended to provide maximum flexibility to the housing construction industry, enabling the HCG to be claimed in a manner that best suited the nature of individual transactions.

While the Act enables RevenueSA to disclose that a HCG has been paid on a particular property, it does not currently make provision for how competing applications for the HCG should be treated.

This has led to a small number of cases where there have been disputes over who the HCG should be paid to when there is more than one application.

The amendments in the Bill operate to ensure that unless otherwise agreed between the parties, the purchaser of the new home should receive the HCG in these situations.

The policy of the Government was always intended to give the benefit of the HCG to the purchasers in these scenarios and the amendments in this Bill provide for that outcome.

I commend this Bill to the House.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause provides for the short title for the measure.

2—Amendment provisions

This clause is formal.

Part 2—Amendment of First Home and Housing Construction Grants Act 2000

3—Amendment of section 7—Entitlement to grants

This is a consequential amendment.

4—Insertion of section 12A

This clause enacts a new section to set out a scheme for making applications for a housing construction grant. Specific provision is made for the situation where the person for whom the new home is being built under a comprehensive home building contract, or an owner builder, receives a grant under the scheme set out in section 12A(2) and then a subsequent purchaser of the new home also makes an application for the grant. Such a provision is helpful because in some cases more than 1 person may potentially apply for the grant.

5—Amendment of section 40—Power to recover amount paid in error etc

This is a consequential amendment.

The Hon. I.F. EVANS (Davenport) (15:39): The housing construction grant was first introduced in October 2012 and was to run until 1 June 2013. The government then introduced an extension of a further six months, until January 2014. The housing construction grant—around $8,500—is available for new homes where the market value does not exceed $400,000 and then fades out for new homes with a market value between $400,000 and $450,000 at a rate of $17 for every $100 in excess of $400,000.

Under the First Home and Housing Construction Grants Act 2000 (the act), only one grant is payable in relation to each new house. Both owner/builders and purchasers are eligible to apply for the grant, and under the current act the grant can be paid to either. This has resulted in a number of cases—five, we are advised—where there has been a conflict arising from both the owner/builder and the purchaser applying for the grant in relation to the same property. Obviously, they had not sorted out at the time of purchase who would be eligible for the grant, which I assume then put the bureaucracy in a difficult position because they had to pick one or the other—based on what criteria, who would know? The purpose of this amendment is to clarify the eligibility criteria in order to avoid this happening.

As the act currently stands, it does not make provision for how competing applications should be treated. As the intention of the government was for the Housing Construction Grant to assist the purchaser, this bill seeks to amend the act to this end. An owner/builder or builder can still receive the grant on the following condition: an applicant who is an owner/builder or who has entered into a comprehensive home building contract must satisfy the Commissioner of State Taxation that he or she has not entered into a contract with a person for the sale of the new home before 1 January 2014 in order to receive the Housing Construction Grant.

The amendments will ensure that the Housing Construction Grant is only payable to an owner/builder or builder where they do not intend to sell the home before it has been resided in, thereby making it ineligible for the Housing Construction Grant going forward or before January 2014, when the grant is due no longer to be available—but watch this space, I suspect.

The bill contains provisions which allow the commissioner to require repayment of the Housing Construction Grant in circumstances where an owner/builder or the builder recipient of the Housing Construction Grant subsequently enters into a contract for the sale of a new home prior to 1 January 2014 and the purchaser applies for the grant. The bill does not allow the parties to a transaction to agree between themselves who should receive the grant. Her Majesty's loyal opposition, having considered the matter at length, have decided to support the bill without amendment.

Bill read a second time.

The Hon. M.F. O'BRIEN (Napier—Minister for Finance, Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (15:42): I thank the opposition for the thorough explanation that has been offered for the situation in which the government and RevenueSA have found themselves.

The second reading speech, and all the media releases at the time, made it quite plain that this was a grant that was to be paid to the purchaser, but unfortunately the legislation was not as precise as it ought to have been and we had builders making claims on the grant and, in some instances, both the purchaser and the builder have been seeking the same grant. This clarifies the situation, and I thank the member for Davenport for the speedy passage of the bill.

Third Reading

The Hon. M.F. O'BRIEN (Napier—Minister for Finance, Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (15:44): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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