Loose-Fill Asbestos Buyback Concession Scheme

Loose-Fill Asbestos Insulation Eradication Buyback Concession Scheme

On 28 October 2014, the ACT Government announced the Loose-fill Asbestos Insulation Eradication Scheme under which it has offered to buy all homes in the ACT affected by loose-fill asbestos (Mr Fluffy) insulation.  Under the Scheme, the ACT Government will acquire, demolish and safely dispose of all affected homes, remediate affected blocks and then resell them to defray overall scheme costs.

One of the elements of the Scheme announced on 28 October 2014 was a duty waiver.  This has been given effect as a concession scheme—the Loose-fill Asbestos Insulation Eradication Buyback Concession Scheme (‘the Buyback Concession Scheme’) — as the concession scheme mechanism is quicker and more efficient than the waiver mechanism under the Financial Management Act 1996.  See Determination 2015-93 (external site) for further details.

Eligible homeowners who surrender an affected block under the buyback program are entitled to a concession of duty on a purchase of a residential dwelling in the Territory.  The value of the concession will be capped at the value of duty that would have been payable on the surrended property, in accordance with the value determined in the valuation of the affected block under the buyback program. 

Eligibility for Concession

The general eligibility criteria for the Buyback Concession Scheme are as follows:

  • the applicant must be the legal title holder of an affected property on 28 October 2014; and
  • the affected property must be one that has been identified by the Territory as containing loose-fill asbestos insulation; and
  • with some exceptions, the applicant must have acquired the legal title to the affected property before 18 February 2014; and
  • the applicant must opt into the buyback scheme and surrender the Crown lease for the affected property to the Territory (or if they own a unit sell their unit to the Territory) in order to access the concession.
  • the new property to which the concession will be applied must be exchanged on or after the 18 February 2014; or
  • In certain circumstances if the agreement precedes the transfer of the Crown lease; and the agreement is completed after 18 February 2014.

A person will also be eligible if, on 18 February 2014, the person did not own the affected property but had already entered into a contract to purchase it and the contract completed after 18 February 2014 and before 28 October 2014. 

Certain persons who acquired an interest in the affected property after 18 February 2014 may also be eligible, for example if you inherited the property through a deceased estate or a family law transfer.

Where an affected property was purchased under a contract entered into between 18 February 2014 and 28 October 2014 homeowners may make a submission to the Head of the Taskforce requesting special consideration.

Conditions

There will be one duty concession per household.  The concession must be used in one transaction on the purchase of a property in the ACT.

The concession cannot be divided.  It is provided to the registered owner of a property.  If there is more than one registered owner, the applicant will need the consent of all other registered owners to utilise the concession.

The duty concession is not required to be used on the next purchase of land in the ACT.  If a person is planning to buy back their former affected property after the property has been remediated, then they may wish to retain the concession for that purpose even if they buy a new home in the meantime.

The concession is not able to be used for the purchase of a property located outside the ACT.

Calculation of the Concession

The duty concession will be calculated at the applicable rate as at 28 October 2014.
The value of the concession will be equal to or less than the amount of duty payable on the surrender sum (or in the case of a unit—the purchase price) of the affected property. 
The duty due on the new property being purchased will be calculated at the rate that is applicable at the date of purchase.

Example 1

- Current home surrendered to the ACT Government for $600,000 – the duty on a property of this value is $20,800
- New property purchase is $800,000 –duty due $30,350
- Concession is for the lower amount of duty - $20,800
- Homeowner will pay $30,350 - $20,800 = $9,550 on the purchase of the new property.

Example 2

- Current home surrendered to the ACT Government for $700, 000 – the duty on a property of this value is $25,800
- New property purchase is $500,000 –duty due $14,600
- Concession is for the lower amount of duty - $14,600
- Homeowner will pay no duty on the purchase of the new property, but will be required to lodge documents for stamping with the ACT Revenue Office
- There is no refund of the difference to the homeowner.

How it works

The Buyback Concession Scheme is administered by the ACT Revenue Office.

Homeowners need to complete the application form found here [RTF, 310Kb], [PDF, 204Kb] to access the concession.  The application form and a copy of the dated and signed Deed of Surrender must be received by the Access Canberra Dickson Shopfront on behalf of the Commissioner for ACT Revenue or mailed to PO Box 293 Civic Square ACT 2608.  

The ACT Revenue Office may require additional information to prove eligibility and process the application.

1.  Exchange on a new home BEFORE exchange of Deed of Surrender for the affected home.

Duty is usually payable 90 days after exchange of the contract for sale.

Eligible homeowners who wish to exchange on a new property prior to exchange of Deed of Surrender for their affected property (or the sale of a unit) may apply to the ACT Revenue Office to postpone the payment of their duty.

Once the exchange of the Deed of Surrender has been executed for the affected property the concession amount can be calculated.  This concession can then be applied during the settlement process of the new property.

2.  Settlement of a new home BEFORE exchange of Deed of Surrender for the affected home.

Eligible homeowners who wish to settle on a new property prior to exchange of the Deed of Surrender for their affected property will need to pay duty at the normal rate.

The concession entitlement will then be calculated when the Surrender Deed is exchanged on the affected property and a refund will be provided by the ACT Revenue Office following completion of the surrender.

3.  Exchange or settlement on a new home AFTER exchange of Deed of Surrender for the affected home.

When there has been an exchange of the Deed of Surrender for the affected property, eligible homeowners may present the exchanged Deed to the ACT Revenue Office and complete the application form to access the concession and have it applied to their new property purchase.

The ACT Revenue Office may require additional information to process the application.

If the affected homeowner subsequently fails to complete the surrender any concession will be repayable to the ACT Revenue Office.

Questions and Answers

1.  What if I have already paid my duty on a new home?

Eligible homeowners who have already settled and paid duty on their new home, occurring on or after 18 February 2014, will have their concession entitlement calculated as part of the surrender process and refunded by the ACT Revenue Office following completion of the surrender of the affected property.

2.  Does the concession apply to landlords?

Yes.  The Buyback Concession Scheme is available to all homeowners who meet the eligibility criteria (see above).

3.  I have payments still owing under the deferred payment first home buyers concession scheme.  How will this be managed?

Any outstanding amounts owed to the ACT Revenue Office from a previous duty transaction will need to be paid in full as part of the surrender process in order to access the Buyback Concession Scheme.  These payments can be made in full directly to the ACT Revenue Office prior to surrender of the affected property or can be deducted from the surrender sum.

Relevant Links

Asbestos Insulation Eradication Buyback Concession Form [RTF, 310Kb], [PDF, 204Kb]

Loose-fill Asbestos Insulation Eradication Buyback Concession Scheme Determination 2015

ACT Government Asbestos Taskforce