We’re frequently asked to explain the stamp duty conecessions for new home builders which were introduced last year by the NSW Government, under the NSW Home Builders Bonus (HBB), to stimulate the construction of new homes in NSW.
HBB provides a full exemption on stamp duty for purchases of vacant land where a new home will be built, homes bought off the plan (e.g. apartments) and purchases of new homes by over 65 year olds who sell their current residence. The concessions apply to transactions completed after 1 July 2010.
A partial concession of 25% of stamp duty for completed new homes (e.g. spec homes) and off the plan purchases where construction has commenced.
The concessions apply as follows:
- Full exemption (100%) on purchases of vacant land up to $400,000;
- Full exemption (100%) on off the plan purchases up to $600,000 where building has not commenced;
- Full exemption (100%) for seniors over 65 years old who purchase a completed new home or an off the plan purchase where construction has commenced up to the value of $600,000;
- Partial concession (25%) of stamp duty payable for completed new homes (e.g. spec homes) up to $600,000;
- Partial concession (25%) of stamp duty payable for off the plan purchases where construction has commenced up to $600,000.
Agreements for sale or transfers of vacant land or a new home will be eligible for the HBB concessions where they are entered into on or after 1 July 2010 and before 1 July 2012. If an agreement to purchase vacant land or a new home 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.
For vacant land, construction must commence with the laying of foundations within 26 weeks after the agreement for sale or transfer and construction must be completed within 18 months after the laying of foundations begins.
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 for sale or transfer is first executed (i.e. contract signed).