This Division sets out eligibility for home purchase or sale expenses allowance (HPSEA) when certain members purchase or sell a home or land in particular situations. It also explains what costs a member may and may not be reimbursed.
A member may be eligible for the reimbursement of the costs of purchasing land to build a home on. Costs may be reimbursed as long as the land is purchased within the time limits in Division 2 section 7.3.23, Time limit on sale or purchase. They need not begin building the home within the four years. Relevant costs for purchasing both land and house may be reimbursed (see section 7.3.31, Amounts and kinds of costs that may be reimbursed). The costs may be reimbursed when a member or eligible person lives in the home.
Example: A member purchases a block of land three years into their posting at a location. They build a house and move into it eighteen months later, or 4.5 years into their posting. They qualify for reimbursement of the relevant costs of purchasing the land and building the house.
A member will not be reimbursed costs of purchasing land when they do both of the following.
They purchase land at a posting location before official written notice of posting to that location is issued.
After they get the notice, they build a home on that land or sign a contract for a home to be built.
They will be eligible for reimbursement of costs involved in building the home.
An eligible person cannot reasonably be expected to purchase a home in some specific locations in Australia. This is because of their remoteness and the quantity and standard of housing available in them. The Commonwealth normally provides the housing there.
See: Division 2 section 7.3.23, Time limit on sale or purchase
A member's purchase or sale benefits when posted to a specified location are the same as if they occupy a Service residence.
This table lists the specified locations by State and Territory.
|1.||New South Wales||Bogan Gate
Exmouth (including Learmonth)
The CDF can approve a location as a specified location. The CDF must be satisfied it would be unreasonable to expect an eligible person to purchase a home there. The CDF must consider all these factors.
The remoteness and isolation of the location.
The quantity and standard of housing available to purchase at the location.
Any other factor relevant to the location.
Persons who can make the decision under subsection 22.214.171.124 on behalf of the CDF:
First Assistant Secretary People Services
A person working in the Pay and Administration Branch who is not below EL1
This section applies if all of these conditions are met.
A member is eligible for the reimbursement of the costs of purchasing a home at a posting location.
At their next posting location, an eligible person purchases a home. They intend to sell the home in the first posting location.
The member is posted back to the first location within the two-year time limit for selling the home in that first location.
In this case, the member is eligible for reimbursement of costs for the following transactions.
Selling the home in the second location.
Selling the home in the first location and purchasing the home in the second location. However, they are eligible only if they do both of the following before they get written notice of posting back to the first location.
Sign the contract for selling or purchasing.
Incur the costs involved.
Example 1: A member is posted from Canberra to Adelaide. Before the posting the member was reimbursed for the costs of buying a home in Canberra. The member signs a contract to sell the Canberra home within the two-year sale period. The member is then posted back to Canberra.
As the a contract to sell the Canberra home was signed before the written notice of posting back to Canberra, the member can be paid sale expenses.
Example 2: A member is posted from Melbourne to Canberra. Before the posting the member was reimbursed for the costs of buying a home in Melbourne. The member signs a contract to buy a Canberra home, and intends to sell her Melbourne one. However, the member is posted back to Melbourne before the Melbourne house is sold, but within the two-year sale period.
As the contract to buy the Canberra home was signed before the written notice of posting back to Melbourne, the member can be paid purchase and sale expenses for the Canberra home.
A member who ceases continuous full-time service may be reimbursed costs of selling the home where they or their dependants live at their final posting location. This can happen if all these conditions are met.
An eligible person incurs costs for the sale.
When the member ceases, they move from the final posting location to another location.
The member's previous benefit was for purchasing a home.
An eligible person signs a contract for sale within 12 months before or after the date they cease continuous full-time service.
Reimbursement of costs for a sale on ceasing continuous full-time service can only be approved when the member has ceased continuous full-time service and moved to a new location.
A member is not eligible for the reimbursement of costs for purchasing a home when they cease continuous full-time service.
Note: In the total workforce model, continuous full-time service may be described as service in Service category 6 or 7. A member who is in Service category 3, 4 or 5 and Service option C is also on continuous full-time service.
This table describes what costs a member may be reimbursed when an eligible person purchases or sells a home. The costs must be assessed as reasonable by a legal firm contracted by the Commonwealth to provide this advice.
|Item||When a member incurs costs for...||they can be reimbursed up to...|
|1.||professional fees and disbursements for the purchase or sale||the amount generally charged by a solicitor or land broker in the state or territory where the home is located.|
|2.||professional fees and disbursements for a related mortgage or discharge of a related mortgage, including an amount of professional fees and disbursements incurred by the mortgagee||the amount generally charged by a solicitor or land broker in the state or territory where the home is located.|
|3.||items 1 or 2 above if they did not engage a solicitor or land broker. This does not include any procurement fee paid to negotiate the mortgage.||reasonable costs.|
|4.||an agent's commission to purchase the home on behalf of the eligible person||the amount generally charged by an agent in the state or territory where the home is located.|
|5.||commission, fees or advertising expenses of an agent or auctioneer who is engaged to sell the home and sells it||the amount generally charged by an agent or auctioneer in the state or territory where the home is located.|
|6.||advertising the home for sale if the eligible person did not engage an agent or auctioneer to sell it||10% of the amount generally charged for such a sale by an agent in the state or territory where the home is located.|
|7.||an amount paid to a mortgagee in addition to the principal sum and interest due under the mortgage for early discharge of mortgage on the sale||an amount equal to six months' interest at the rate payable on the date of the discharge of the mortgage.|
|8.||an amount a mortgagee requires the eligible person to pay for mortgage insurance for the purchase||the amount a mortgagee requires the eligible person to pay for mortgage insurance for a loan amount up to and including the purchase price of the home.|
|9.||an amount of government duties or fees for the purchase or sale, or related mortgage or discharge of mortgage||the amount generally charged by a government authority in the state or territory where the home is located.|
Any Goods and Services Tax included in the professional and other charges mentioned in items 1 to 8 above is a transaction cost. It may be reimbursed as a part of the cost of those charges.
If other people hold a registered proprietary interest in a home along with an eligible member, the member is eligible for a share of the total reimbursement amount. The share is based on the proportion of the interest the member holds. A member's dependant does not count as a holder of a registered proprietary interest when the member holds an interest.
Example: A member purchases with one other person. The HPSEA reimbursement will reflect the share of ownership. For example, equal shares would result in payment of 50% of the HPSEA amount.
These kinds of costs may not be reimbursed.
Capital costs. Normally owner-builders have these costs. Sometimes builders constructing a home for the member have them. Goods and Services Tax paid by a member or eligible person on capital purchases may not be reimbursed.
Example: Building materials.
Re-financing costs. These are financial institution and legal costs involved in varying an existing mortgage to raise finance for the new home.
Costs normally associated with home ownership.
Example: Council rates, utilities.
Costs that can be put down to reasons of a non-Service nature.
Examples of costs that may not be reimbursed are listed below. The list does not cover all possible costs of this kind.
Site surveys before construction to set levels and positioning and similar matters.
Owner-builder permits or licences.
Workers compensation premiums or levies.
Long service leave levies.
Architectural fees for design or inspections.
Local authority fees relating to construction.
Building or other insurances.
Pest control treatments, including under-slab treatments.
Carpet and other home cleaning costs.
House or contents insurance premiums.
Yard or garden cleaning or maintenance services.
Home inspection, architectural or engineering survey for future structural changes or renovation of existing premises. This is not the same as pre-purchase/sale inspections or survey of an existing home to determine its structural soundness.
Costs of inspections carried out before selling to determine any treatments or repairs needed.Prospective purchasers would normal bear these costs.
Utility connection fees.
Council or local authority rates.
TV antenna installation or realignment.
Costs involved in the removal of a home by a home removalist.
Swimming pool installation, inspections and treatments.
Installation of water tanks in rural areas where the home is not connected to town water.
Application to Reservists: Yes, on continuous full-time service longer than 12 months.
Copies of forms are available on the webforms system or through the Defence Service Centre.