Commonwealth Numbered Regulations - Explanatory Statements

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FIRST HOME OWNERS REGULATIONS (AMENDMENT) 1991 NO. 297

STATUTORY RULES 1991 No. 297

FIRST HOME OWNERS REGULATIONS (AMENDMENT)

Issued by authority of the Minister for Health, Housing and Community Services.

Sub-section 42(1) of the First Home Owners Act 1983 (the Act) provides that the Governor-General may make Regulations for the purposes of the Act.

The Act provides that assistance shall not be paid to an applicant if the amount of his or her taxable income for the relevant year exceeds a prescribed income limit. Ordinarily, the relevant year of income is the financial year preceding the date on which the applicant entered into the contract to purchase or build his or her home, or in the case of owner-builders, commenced the construction of his or her home ("the prescribed date"). However, section 22 of the Act under certain circumstances permits the applicant's eligibility to be assessed on the income of the year in which the prescribed date falls ("the current year"), or the following year ("the succeeding year"). Where section 22 applies, subsection 19(2) provides for the applicant's income in the relevant year to be reduced in accordance with the Regulations under the Act to enable that income to be tested against the income limits applicable in the financial year preceding home purchase. This ensures equity with applicants who have purchased their home in the same year but are being assessed on the basis of the income for an earlier year (ie, the "preceding year").

The First Home Owners Regulations provide certain formulae to be used in the calculation of the reduced amount of taxable income (Regulation 4A). The formulae are based on yearly changes to Average Weekly Earrings.

Previously, Regulation 4A provided appropriate formulae in cases where the applicant's relevant year of income is the 1983-84, 1984-85, 1985-86, 1986-87, 1987-88, 1988-89 or 1989-90 year. The First Home Owners Regulations (Amendment) amend Regulation 4A to provide for additional formulae in cases where the applicant's relevant year of income is the 1990-91 year.