The NSW property market has been given a boost in the 2010 State Budget with incentives for those building their own home.
From 1 July 2010, stamp duty will be eliminated for home builders purchasing a home (before construction starts) worth up to $600,000. The value of the vacant land must not exceed $400,000. This program will be in place for two years.
A 25% stamp duty concession will also apply to homes valued up to $600,000 already under construction or newly completed.
For seniors (over 65 years), stamp duty will also be eliminated for the next two years for those who buy and move into a newly-built home valued up to $600,000, conditional on the selling of their existing home. This is known as the ‘Seniors Principal Place of Residence Duty Exemption’ and is part of the new housing concessions offered in the 2010 budget by the NSW government. (see new housing concessions NSW Budget 2010)
These and other changes are introduced under the State Revenue Legislation Amendment Bill 2010.
These concessions are part of the Home Builders Bonus (HBB) and will extend incentives offered by the NSW government beyond those offered to first home buyers – an attempt to stimulate the property market and thereby relieve some of the pressure on the high-demand rental market. There is no limit to the number of properties that a buyer can purchase under the scheme and still be eligible for the concession.
Purchase agreements or transfers must be in relation to the purchase of a new home, purchase of land where the new home is to be built or an off-the-plan purchase.
A new home refers to a home not previously lived in as a place of residence. Agreements must be entered into on or after 1 July 2010 and before 1 July 2011. The new home must be complete and ready for occupancy.
Off-the-plan agreements must be entered into on or after 1 July 2010 and before 1 July 2011, and must be completed by 31 December 2012. Alternately they may be entered on or after 1 July 2011 and before 1 July 2012, and must be completed by 31 December 2013.
For agreements related to vacant land, the laying of foundations must commence within 26 weeks of the agreement being entered into and the building must be finished with 18 months. Longer periods are subject to approval by the Chief Commissioner.
Home builders have three months from entering an agreement to submit an application under the HBB scheme.
In relation to land sale, the agreement must relate to the all of the parcel of land. If the land is a parcel of a larger lot where other homes are built on the property, the agreement or transfer must relate to the part of land that is an exclusive to the home being built.