Get your next home with extra help from Defence. Allowances for HPAS have gone up to $13,220. Photo by Clint Heyer

HPSA grant increases

By Maj Jill Jackson
More than 1500 ARA personnel have received assistance to buy and sell their own homes since August 2002, using the Homes Purchase Assistance Scheme (HPAS) and Home Purchase or Sale Expenses Allowance (HPSEA).

The money available for first home purchases under the scheme increases from September 11.

The allowances are designed to help you live in your own home on posting by paying the legal, financial, real estate and government charges when you buy or sell your home.

HPAS was introduced, for a first home purchase, on July 1, 2000.

The grant, as at September 11, is $13,220. It is paid via DEFPAC where tax is deducted before it goes into your bank account.

Ideally it is paid to you before settlement on the house occurs. The basic requirement is to buy a home in your new posting locality and live in for at least one year. You can only receive HPAS once during your period of service.

For the other times that you buy or sell on posting you use HPSEA. For the purchase, you may get back expenses like solicitor’s disbursements, stamp duty, bank application fees, mortgage insurance and registration fees and pre-purchase pest and building inspection fees.

When selling the property, you may get back agent’s commissions, advertising costs, auctioneer’s costs if applicable, solicitor’s commission and fees and early discharge of mortgage fees.

To qualify for HPSEA you must sell your home within two years of receiving the posting order and buy in the new location within a period, beginning with receipt of the posting order and ending four years after starting the new posting.

A purchase or sale occurs when the contract is exchanged, not at settlement.

 

HPAS explained

Does it have to be an established home?
It can be an established home or one being built. It can be a house, duplex or apartment, but not a caravan or mobile home.

It can be in a residential area or out in the country as long as it is within your posting locality.

Is this just for married people?
No. You can buy the home on your own or with your spouse and get the full assistance.

If you team up with other entitled Defence members, you each receive a proportionate share of the total assistance.

If you are a dual ADF couple, only one of you gets the entitlement for each purchase or sale.

What about tax implications?
The initial HPAS purchase is taxed and will be included as income on your group certificate.

It is considered for assessments of child support payments, HECS repayments, etc, but it is not reportable for fringe benefits tax purposes.

HPSEA is not income and since July 1, 2000 has not been subject to fringe benefits tax reporting.

Can I get HPSEA if I buy a house at my new posting before I sell my old house?
After an initial purchase, you need to maintain the sell-buy-sell cycle. So if you buy in your new location, you will have to wait until you sell in your old location to be reimbursed.

Do I have to live in the home?
Yes. Both allowances are for members to use their homes as their residence.

For HPAS it is within a month of settlement or after the home can be occupied, or within a year if you are building.

For HPSEA it is after settlement has occurred, however, payment will not occur until you have occupied the home.

What if I don’t want to purchase in the new locality?
There is no requirement to buy and sell on every posting. Although the idea of the scheme is that members buy and sell in each location as they are posted, allowances are made for times when this isn’t going to work.

This includes postings overseas, where you have to live in or are MWD(S), when you’re posted within a location and can still commute to work, or when you go to remote locations like Tully, for example.

In these cases the two-year time frame to sell goes from the date of your next posting.

I am thinking of getting out. Can I access the scheme?
You can not access HPAS if you are within 12 months of discharge or transfer to the reserves. HPSEA (for sales and purchases) is available if you sell your home at your final posting location to move to another location where you plan to settle.

HPSEA does not assist with the purchase of your next home in these circumstances. Reimbursement for the sale of your home in your last posting location is paid once you have been discharged.

How do I apply?
The form AC 970 (see the web forms system on the DEFWEB) covers both HPAS and HPSEA.

Section 7 of the form lists the documents you need to supply especially original tax invoices.

Once you have signed the form it needs to be certified by your unit. The one exception is discharged members.

Units and discharged members send the applications to: Directorate of Entitlements at CP2-6-126, Campbell Park Offices, ACT 2600, for approval and processing.

How long does it take for the money to come through?
For HPAS the approval will normally come through within a couple of days of the application being submitted. The money should be shown on your SVA the following fortnight.

With HPSEA the Australian Government Solicitor assesses the costs so you should allow up to two months.

Payment is authorised to your unit to pay through ROMAN into your direct credit account.

Where can I find out more information about HPAS and HPSEA?
PACMAN Volume 2, Chapter 4, Part 8, which is at http://defweb.cbr.defence.gov.au/dpedet/