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Boarding house - Fire safety upgrade grants

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Overview

The Boarding House Financial Assistance Program – Fire Safety (BHFAP – Fire Safety) provides grants of up to $60,000 to help owners and operators of boarding houses undertake essential fire safety works. These grants improve fire safety for boarding house residents, and help retain boarding houses that provide long term, low cost housing.

To be eligible for a BHFAP – fire safety grant, boarding houses must be zoned ‘residential’ by local council, provide long term, low cost accommodation as defined by the Office of State Revenue for the purposes of granting land tax exemption and be registered with the Office of Fair Trading.

Grants are paid in instalments, generally over five years. The first grant payment for approved applicants will be made once the fire safety work is complete and approved by FACS- Housing.

Premises which have already received a grant for building new boarding house accommodation are generally not eligible to apply.

Additionally, the NSW Government offers Land Tax Exemption for Boarding Houses which meet certain criteria. To find out more visit Office of State Revenue - Land Tax Exemption for Boarding page.

Who can apply for fire safety grants?

If you own or manage a boarding house, or you are extending your boarding house or building a new one, you are eligible to apply for a fire safety grant. This includes owners/managers of assisted boarding houses authorised by the Department of Family and Community Services (Ageing, Disability and Home Care) (Licensed Residential Centres) under the Youth and Community Services Act 1973/ Boarding Houses Act 2012 and boarding houses built or managed by community housing providers.

Fire safety grants are not available for:

  • Backpacker or tourist accommodation, or premises that include any tourist accommodation
  • Properties owned by commonwealth, state or local government.

Am I eligible for a fire safety grant?

To be eligible for the fire safety grant, your boarding house must:

  • provide long term, low cost accommodation,
  • be rated as ‘residential’ by the local council, and
  • be registered with NSW Fair Trading (once complete if you are building a new boarding house).

If you are applying for a fire safety grant to cover work on an existing boarding house, the fire safety work proposed must be scheduled in a fire order issued by council.

In general, premises which have received a BHFAP – New supply grant for building new boarding house rooms are not eligible for a BHFAP - Fire safety grant.

What does long-term low cost accommodation mean?

The Boarding House Financial Assistance Program uses the terms long-term and low cost as it’s defined by the Office of State Revenue (OSR) for the purposes of granting a land tax exemption to a boarding house. These are defined as follows:

  • long term means that at least 80% of the rooms are occupied by someone who has lived in the boarding house for at least three months during the year (though this does not need to be consecutive months)
  • low cost means that tariffs are less than those set each year by the Office of State Revenue for the purpose of obtaining a land tax exemption.

For example, to be eligible for the land tax exemption in 2015, the maximum tariff that can be charged are:

  • $356 per week for a single room with full board and lodging
  • $238 per week for a single room with less than full board and lodging
  • $590 per week for a family or shared accommodation with full board and lodging
  • $395 per week per room for family and shared accommodation with less than full boarding and lodging.

To qualify as ‘Full board’ the operator must supply on a daily basis a minimum of two cooked full main meals to each resident (equivalent in value to the difference between the threshold rental for a room without board and a room with full board) and weekly supply of fresh linen (sheets and bath towels). The tenants Rental Agreement must specify that these are included in their rent.

OSR tariffs are updated each year and are available on the Office of State Revenue website.

Note that it is not necessary for the premises to have applied for land tax exemption, only that they are eligible according to the Treasurer’s Guidelines as outlined in the relevant OSR Revenue Ruling.

Office of State Revenue 2015 Revenue Ruling No. LT095. Exemption – Land Used and Occupied Primarily for a Boarding House – 2015 Tax Year

What fire safety works can the grant cover?

Fire safety grants can be used to cover the expense of any essential fire safety works that are specified on a Council’s fire order for the premises, up to a maximum of $50,000. This includes items such as automatic sprinkler systems, smoke detectors, emergency lighting, fire-rated construction, solid core doors and fire extinguishers. It can also cover:

  • costs of system design consultants
  • construction certificate fees for the relevant works (if applicable).

Fire safety grants cannot be used for works not directly related to essential fire safety upgrading, such as:

  • painting
  • the replacement of non-fire-retardant fittings and furnishings such as carpets, curtains or cooking appliances
  • costs of fire drills, periodic inspection, maintenance and certification of ‘essential services’ required by the council, landline rental for back-to-base alarm connections
  • costs associated with applying for the grant, such as feasibility studies, quantity surveyor’s fees, the cost of quotes
  • the demolition and disposal of existing structures
  • work done under an Owner-Builder Permit, or the hire of casual day labour that is not on a trade or contract basis.

How much will I be eligible for?

Fire safety grants can be up to a maximum of $60,000.

The amount of the grants is calculated differently if you are upgrading existing premises than it is if you are extending or building new premises:

  1. If you are upgrading an existing boarding house, the grant can equal the amount you spent for the essential fire-safety works specified in a council fire order, up to a maximum of $60,000.
  2. If you are extending an existing boarding house, or building a new one, grant amounts are determined by calculating the cost of the new construction (excluding GST) pided by the gross floor area of the new construction. This is referred to as the construction cost rate. Grants are calculated according to the following:
    • If the construction cost rate is less than or equal to $1,250/m2, the grant will be 8%of the construction cost, or
    • If the construction cost rate is greater than $1,250/m2, the grant will be a flat rate of $100/m2 of the gross floor area.

For premises rated for mixed uses (for example residential and business), grants are calculated on the proportion of the gross floor area of the premises that are residential only.

Can I apply for a fire safety grant for work I have already completed?

Yes, provided the date when your council signed off the satisfactory completion of the works (occupancy certificate or other documentation) is not more than three years before the date you submit your application for the grant.

Can I apply for a fire safety grant for work that has not yet begun or is underway?

Yes. Attach copies of the fire order and detailed quotes for the work involved.

If your application is assessed as eligible and the quotes are assessed as being reasonable for the works specified, Housing NSW will notify you in writing of its ‘in principle’ approval of your application. Note that grants are paid on actual funds expended for fire safety upgrading, not on quoted amounts.

To apply for safety upgrade grants

To apply, complete this Fire Safety Application Form and submit to:

Attention: Boarding House Financial Assistance Program – Fire safety
C/ Centre for Affordable Housing, Community, Homes and Place Directorate, Department of Family & Community Services, Locked Bag 4001, Ashfield BC NSW 1800

Make sure you have attached all the evidence that is requested to support your application.

How will my application be assessed?

Applications for fire safety grants will be assessed as they are received.

Housing NSW will assess the application to ensure it meets the eligibility criteria. This includes ensuring that your boarding house provides long term, low cost accommodation, and is rated as ‘residential’ by council.

All quotes or invoices for fire safety work will be reviewed by Housing NSW and compared to similar works for other premises. If, after consultation with you, costs are considered to exceed average or typical costs, the grant amount will be based on an application of typical, rather than quoted/invoiced, costs.

If an eligible application is for work that has not yet begun or is underway, approvals may be granted ‘in principle’ and payment of grant monies will depend on the work being completed as outlined on the application, and receiving necessary approvals.

Housing NSW will advise you of the outcome of your application in writing, including the amount you are eligible for if your application is successful.

What happens if my grant application is successful?

Fire safety grants are paid in an equal annual instalment over a period of five years. The first instalment is made once the fire safety work is complete and approved.

If your application is successful, the process to receive your grant is as follows:

  • Notify Housing NSW when your fire safety work is complete. You can do this at application if your work is already complete. If you have been extending your boarding house or constructing a new one, you also need to attach a copy of the occupancy certificate from your local council.
  • A Housing NSW representative will then inspect your premises to ensure your fire safety work is consistent with the information provided in your application.
  • Once the Housing NSW inspection is complete, and all necessary paperwork has been received, Housing NSW will confirm the grant amount you will receive, a payment schedule and that your first grant payment can be made.
  • You then need to submit an invoice to Housing NSW for the amount of the first instalment. Housing NSW will pay on receipt of this invoice. Note that grant payments are calculated exclusive of GST. To receive the 10% GST component, this must be a Tax invoice which confirms your GST registration and includes an ABN.

Each subsequent year, you will be required to submit an invoice for the amount due. You must also attach a statutory declaration confirming that, in the previous calendar year, the premises were leased at or below tariffs set by the Office of State Revenue for the purposes of assessing land tax exemption during that period.

What are the taxation arrangements of the grant?

Grant payments are calculated exclusive of GST. To receive the 10% GST component, submit a tax invoice to Housing NSW with confirmation of your GST registration and your ABN.

The Australian Taxation Office has ruled previously that financial assistance grants will be subject to taxation. Applicants should seek advice as to the taxation implications of grants.

Definitions explained

Boarding house

A boarding house is a building wholly or partly let as lodgings in which:

  1. there are rooms, some or all of which may have private kitchen and bathroom facilities, that accommodate one or more lodgers
  2. there may be shared facilities, such as a communal living room, bathroom, kitchen or laundry
  3. each letting provides the occupant with a principal place of residence
  4. the premises must be used and occupied by at least three long term residents who are not members of the family of the owner or manager, or are not members of the family of a shareholder of a company if an exempt proprietary company is the owner
  5. lodgers are provided with a principal place of residence for 3 months or more

This definition does not include backpackers’ hostels, a group home, a serviced apartment or other tourist establishment, seniors housing or hotel or motel accommodation or a residential flat building or premises which are licensed under the Liquor Act 1982.

Backpacker hostel

Backpacker hostel means a building or part of a building which provides accommodation for travellers, tourists or persons engaged in recreational pursuits, which is not their principal place of residence.

Serviced apartments

Serviced apartments means a building containing two or more dwellings intended to be used for short-term accommodation of travellers and tourists and where such dwellings are cleaned or otherwise serviced or maintained by the owner or manager of the apartments or the owner's or manager's agent.

Long term, low cost rental accommodation

BHFAP uses the definitions of long term and low cost developed by the Office of State Revenue for the purpose of assessing eligibility for Land Tax Exemptions.

Full board and lodging

Describes accommodation in a boarding house where three meals a day, plus other services such as regular provision of clean linen, are included in the tariff.

Classification of boarding houses

Under the Building Code of Australia, boarding houses are classified as follows:

  • Class 1b - premises which accommodate up to and including 12 persons, and where the gross floor area of the premises is less than or equal to 300 square metres.
  • Class 3 - premises accommodating more than 12 persons or where the gross floor area of the premises is more than 300 square metres.

Gross floor area

For the purposes of estimating the area of a boarding house construction, the gross floor area is the total floor area of new construction, measured between the inner faces of the external walls.

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