The NSW Home Builders Bonus (HBB) has been introduced to stimulate the construction of new homes in NSW. HBB provides a full exemption on stamp duty for new homes where the value does not exceed $600,000 and building has not commenced. It also applies to vacant land worth up to $400,000. There are also concessions for other purchases of new homes and homes off the plan. For example, under the program those who purchase a new home off the plan before the start of construction will pay no stamp duty and specific exemptions for eligible seniors purchasing a new home have also been introduced. The $140 million program was launched at the start of this financial year (1 July 2010) and will run for two years.
NSW families and investors can save up to $22,490 under the new initiative – and first home buyers will receive benefits of up to $29,490. The cuts to stamp duty are a welcomed initiative for many homebuyers and can reduce a lot of the usually monetary stresses. There is no limit to the number of new homes a person may purchase under these concessions. Additionally, any entity is able to make the purchase and be considered eligible for the relevant concessions and there is also no requirement for the purchaser to reside in the newly purchased property.
The various exemptions and concessions available are briefly outlined here.
• Stamp duty will be cut to zero for off the plan home purchases worth up to $600,000. An off the plan purchase is an agreement for the sale of transfer of land intended to be used as the site of a new home, which is to be built before completion of the agreement.
• The zero stamp duty will only apply prior to any construction commencing on house and land packages or new apartments.
• Stamp duty will be cut by 25 per cent for people buying a newly-constructed home worth up to $600,000.
• The 25 per cent stamp duty cut applies to home purchases made at any time during the construction period, or at completion.
First home buyers
• First home buyers will also be eligible for these stamp duty cuts, giving them total benefits of up to $29,490
• They will still be able to access the NSW Government-funded $7000 First Home Owners Grant as well as the NSW Home Builder’s Bonus.
• Stamp duty for people aged over 65 will be cut to zero when they purchase a newly constructed home worth up to $600,000.
• This will only apply to people aged over 65 selling their primary place of residence and moving to a newly-constructed home, to encourage down-sizing and to encourage the regeneration of the state’s housing stock.
Agreements entered into on or after 1 July 2010 and before 1 July 2012 for the sale or transfers of vacant land or a new home are eligible for consideration under the HBB. Is is important to note that if an agreement to buy a new home or vacant land has taken place (i.e. contract signed) before 1 July 2010 but settlement will not take place until after 1 July 2010, the concessions will not apply.
In order to be eligible for concessions when building on vacant land, foundations must be laid within 26 weeks from the date of agreement for sale or transfer. This construction must also be completed within 18 months after the initial foundations being laid. Also it is important to remember that where 25 per cent stamp duty reduction applies for the purchase of a completed new home, duty is payable within three months of the date that the agreement is first executed (i.e. contract signed).
If you think you are eligible for the Home Builders Bonus, or are planning on building a new home, the experienced team of lawyers and accountants at The Quinn Group can help you make the most of these great concessions. For more information or general enquiries submit an online enquiry. Quinns conveyancers are able to assist with your sale and transfer of land or property, call 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.