Issue
Is a First Home Owners Grant scheme payment received by the taxpayer assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No. A First Home Owners Grant scheme payment received by the taxpayer is not assessable income under section 6-5 of the ITAA 1997 as it is not income according to ordinary concepts.
Facts
The taxpayer received a payment under the First Home Owners Grant scheme as an eligible first home owner.
Reasons for Decision
From 1 July 2000, eligible first home owners were entitled to receive a one off payment under the First Home Owners Grant scheme, an initiative of the Commonwealth Government administered by the States and Territories.
The primary purpose of the payment is to provide financial assistance to home owners in the purchase of their first home.
Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year.
Ordinary income is income according to ordinary concepts and is generally considered to include: • amounts received in return for personal services, whether received in the capacity of an employee or otherwise; and • amounts received periodically or regularly and which the recipient relies on for the maintenance of themselves and /or their dependants ( Federal Commissioner of Taxation v. Dixon (1952) 86 CLR 540; [1952] HCA 65).
First Home Owners Grant scheme payments are not paid because of employment, services rendered, investment or the operation of a business. They are a one off lump sum payment and the motive of the body making the payment is to provide assistance for the purchase of a first home, not to help the recipients or their dependants pay for their regular living expenses.
The payment under the scheme is not income according to ordinary concepts and therefore is not ordinary income. Accordingly, the First Home Owners Grant scheme payment will not form part of the taxpayer's assessable income under section 6-5 of the ITAA 1997.
Amendment History
Date of amendment Part Comment 6 June 2014 Title Update heading from 'Personal tax' to 'Income tax' Issue Decision Facts Reasons for Decision Update name of scheme Case References Add medium neutral case reference Related ATOIDs Add ATOID reference
Date of amendment | Part | Comment
6 June 2014 | Title | Update heading from 'Personal tax' to 'Income tax'
Issue Decision Facts Reasons for Decision | Update name of scheme
Case References | Add medium neutral case reference
Related ATOIDs | Add ATOID reference