The opportunity to claim a grant to assist with the purchase of
a property will often be an important consideration for a buyer.
Some property developers use the availability of the First Home
Owner's Grant when marketing properties to prospective
In Gonzalez & Anor v Commissioner of State Revenue
 QCAT 65, the Queensland Civil and Administrative Tribunal
considered the circumstances in which a person is entitled to the
First Home Owner's Grant, and the possibility for it to be
required to be repaid if it is later found that the relevant
eligibility criteria were not established.
The original developer of a unit went into receivership, and the
unit was sold to a subsequent developer, who then sold the unit to
Mr and Mrs Gonzalez. Mr and Mrs Gonzalez purchased the unit using
funds which included the First Home Owner Grant granted by the
Commissioner of State Revenue pursuant to the First Home Owner
Grant Act 2000 (FHOGA). However, following
their purchase of the unit, the Commissioner required Mr and Mrs
Gonzalez to repay the grant on the basis that the unit was not a
"new home", and Mr and Mrs Gonzalez applied to the
Queensland Civil and Administrative Tribunal to review the
Pursuant to Section 10(1)(b) of the FHOGA, a grant is payable
for an 'eligible transaction', which Section 5(1)(a)
defines as a contract made for the purchase of a "new
Mr and Mrs Gonzalez submitted that because the seller did not
occupy the unit and did not intend to occupy the unit and no other
person had occupied the unit, the property was a new home.
However, the Tribunal found that the legislation requires that a
"new home" is something that has not been
previously occupied or sold as a place of residence, and
that if either of those things are established then the property
will not be a "new home". The Tribunal noted:
"The test of 'sold as a
place of residence' is objective and does not depend on the
acts or intentions of the parties, but the predominant character of
the property. It is not physically moving in or the parties'
intent that characterises the property, but the purpose for which
it is built."
The Tribunal noted the purpose for which the unit was built from
the Transfer document of the previous sale, which noted the
"current land use" as "multi-unit" and not
commercial. The Tribunal therefore found that the property was
"previously 'sold' as 'a place of
residence' – a place to live in or reside".
The consequence of this finding was that Mr and Mrs Gonzalez did
not enter into an "eligible transaction" and were
therefore not eligible for the First Home Owner Grant for a
Mr and Mrs Gonzalez contended that this outcome was anomalous
with the intention of the FHOGA, which was to encourage first home
owners. However, the Tribunal noted that in 2012 Parliament shifted
its policy intent away from helping first home buyers as a whole by
amending the definition of "eligible transaction" so as
to restrict eligibility for the grant only to first home buyers who
build or buy a "new home".
Mr and Mrs Gonzalez claimed that they would not have purchased
the property if the Commissioner had not approved the grant and
that the Commissioner had ample opportunity to reject the grant
prior to the contract becoming unconditional. However, the Tribunal
held that this does not mean that the Commissioner is prevented or
stopped from reassessing eligibility when the initial assessment is
based on incorrect information. The Tribunal stated that it was
incumbent upon Mr and Mrs Gonzalez, as applicants for the grant, to
have provided correct information to the Commissioner and conducted
proper checks on the property that they were purchasing.
The Tribunal therefore confirmed the Commissioner's decision
to disallow an objection to the decision to repay the grant.
First home buyers, real estate agents, property developers and
advisors alike should all be aware of this decision which
interprets the parameters of what amounts to an "eligible
transaction" for the purposes of the FHOGA, as an
incorrect application for a grant could result in a home buyer
being required to repay the grant.
ATO has released 2 draft fact sheets relating to the 2010 amendments to corporate law and tax in relation to dividends.
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