FHOG and moveable buildings

This ruling replaces Revenue Ruling FHOG-001. It clarifies that the costs of removing and relocating a moveable building and making it ready for occupation as a place of residence form part of the consideration for an eligible transaction.

Preamble

1. Under the First Home Owner Grant and Home Buyer Schemes Act 2000 (the Act), a grant of up to $10,000 is payable to a first home owner who satisfies the eligibility criteria and completes an eligible transaction.

2. Section 13(1) of the Act provides that one kind of eligible transaction is the building of a home by an owner builder.

3. Section 13(6) of the Act provides that if a person purchases a moveable building and intends to use it as a place of residence on land they own or in which they otherwise have a relevant interest, but on which the building is not situated at the time of purchase:
   • the Act applies as if the person were an owner builder building a home on the land;
   • the commencement date of the transaction is taken to be the date of the contract to purchase the moveable building; and
   • the completion date is taken to be the date the moveable building is ready for occupation as a place of residence on the land.

4. A moveable building does not include a mobile home or caravan.

5. Because section 13(6) of the Act treats the purchaser of a moveable building as an owner builder, section 13(7)(c) provides that the consideration for the transaction is the actual costs they incur in carrying out the work, excluding any allowance for their own labour.

6. In some cases, a person may acquire a moveable building for little or no money but then incur significant costs in removing and relocating the building onto their land and making it ready for occupation as a place of residence. The purpose of this ruling is to clarify whether those costs form part of the consideration for an eligible transaction under section 13(7)(c) of the Act.

Ruling

7. Where a person acquires a moveable building and intends to use it as a place of residence on land they own or in which they otherwise have a relevant interest, but on which the building is not situated at the time of purchase, the following costs form part of the actual costs they incur in carrying out the work:
   • the costs of removing and relocating the moveable building onto the land; and
   • the costs of making the moveable building ready for occupation as a place of residence on the land.

8. Those costs therefore form part of the consideration for the transaction under section 13(7)(c) of the Act.

9. For an eligible transaction of this kind, the amount payable as a grant is the lesser of the consideration for the transaction or $10,000.

10. To support their application, an applicant must provide:
    1. a copy of the occupancy permit; and
    2. evidence of the acquisition of the moveable building (for example, a letter from the previous owner confirming that the building was acquired from them), together with an itemised list of the costs incurred in removing and relocating the building and making it ready for occupation as a place of residence on the land, and receipts for those costs.

    Where an applicant cannot reasonably provide the evidence described in paragraph 10(b), the Commissioner may instead accept a statutory declaration confirming the acquisition of the moveable building and setting out the itemised costs incurred in removing and relocating the building and making it ready for occupation as a place of residence.

Disclaimer

Rulings do not have the force of law. Each decision made by the State Revenue Office is made on the merits of each individual case having regard to any relevant ruling. All rulings must be read subject to Revenue Ruling GEN-001.

This is a draft ruling only, and is not available for publication, nor may it be relied upon by taxation officers, taxpayers or practitioners.