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Stamp duty exemptions and concessions affect new home buyers and builders

Property Law News | March 2012

The NSW Government’s “First Home Plus” scheme, which offered exemptions on Stamp Duty for eligible first home buyers in NSW, was abolished as of 31 December 2011.  However, certain first home buyers will still be eligible for exemptions or concessions on stamp duty under the new “First Home – New Home” and “Home Builders Bonus” schemes.  The New Home scheme applies to the purchase of completed new homes, vacant land on which the purchasers intend to build their first home, and purchases “off-the-plan”. The Home Builders Bonus exemptions apply to the purchase of vacant land on which it is intended to build a residence, and to purchases “off-the-plan”, where construction has not commenced as at the date of exchange.  A “new home” is a property that has not previously been occupied or sold as a residence.

The New Home scheme exempts eligible purchasers from stamp duty on the purchase of new homes valued at up to $500,000, and offers concessions for new homes valued at up to $600,000.  Where eligible purchasers enter into a Contract for the purchase of a vacant block on which they intend to build their first home, a stamp duty exemption will apply where the vacant land is valued at up to $300,000.  Stamp duty concessions will apply where the vacant land is valued at up to $450,000.

As with the former First Home Plus scheme, to access the New Home and Home Builders Bonus exemptions and concessions, purchasers must occupy the relevant property as their principal place of residence for a fixed period, commencing within a specified time after completion of the purchase.  Please do not hesitate to contact us to discuss your eligibility for these concessions and/or exemptions.

Buying vacant land

Where eligible purchasers enter into a Contract to purchase vacant land on which they intend to build their first home, a full exemption on duty is available under the Home Builders Bonus where building of the new home will commence within 26 weeks of completion of the Contract to purchase the land, and the unimproved value of the land does not exceed $400,000.   As noted above, purchasers who cannot meet these requirements may still be eligible for a concession on duty under the First Home – New Home scheme.  A 25% concession is available under the Home Builders Bonus Scheme where construction has commenced as at the date of exchange.

Buying “off-the-plan”

Exemptions and concessions on stamp duty will apply to purchases of new homes “off-the-plan” where purchasers are able to show that construction of the new home has not commenced as at the date of the Contract for Sale (that is, the date of exchange).  A 25% concession is available under the Home Builders Bonus Scheme where construction has commenced.

As noted above, a full exemption under the First Home – New Home scheme will apply to off-the-plan purchases of property valued at up to $500,000.  Properties valued at between $500,000 and $570,500 will attract a partial concession under the New Home scheme.  For properties bought off-the-plan that are valued between $570,500 and $600,000, the Home Builders Bonus scheme will allow purchasers to access a 25% concession on duty.

Senior’s Principal Place of Residence Exemption

Purchasers aged 55 or more may be eligible for a full exemption on stamp duty where:

  • The purchaser(s) occupy the property as their principal place of residence for at least 12 consecutive months, commencing within 12 months of completion of the purchase; and
  • The purchaser(s) have owned, occupied and sold their former principal place of residence in the last 12 months, or will do so within 6 months of completion of the purchase of the new residence.

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