In a bid to increase the supply of new homes the government has recently announced cuts in stamp duty for vacant land, off the plan purchases and newly constructed homes in NSW.
Starting from the 1st of July 2010 and ending on the 30th June 2012 stamp duty will be cut down to zero for:
- Vacant land up to $400k
- New homes up to $600k
Vacant land buyers will need to start building within 26 weeks of the approval of sale or transfer, unless otherwise allowed by the Chief Commissioner. Furthermore, building must be completed 18 months after foundations had been laid down.
For those who have just purchased a new home, an agreement of sale or transfer will not be eligible for the Home Builders Bonus (HBB) if it replaces an agreement of sale or transfer made before 1st July 2010 that was substantially the same property.
Who is eligible?
According to the Office of State Revenue the new HBB is available for:
- owner occupied and investment properties – can be applied multiple times.
- first home buyers - either apply for HBB or First Home Plus concessions but not both, so will have to decide which one is of greater benefit.
Senior home buyers
Seniors, 65 years and over are being encouraged to down size their homes and are eligible for the Seniors Principal Place of Residence Duty Exemption which provides a full exemption of stamp duty based on the following conditions:
- They are purchasing a new home up to $600k
- Purchases will be occupied as their primary place of residence
- They must be selling their current residence withing 6 months
- Can only apply for the exemption once
Developers and builders
According to ABC News, developers and builders are also strongly supporting the NSW cuts to stamp duty:
- Developers benefit from a 25% reduction to applicable stamp duty for properties newly built or currently under construction drawing more off the plan buyers. This will also help attract final bank or investor finance to allow the project to go ahead.
- Builders look forward to a boost in jobs from the increase in demand for new home buyers and investors looking to benefit from the changes.
So if you're an investor or an owner-buyer looking for a new property valued at $600,000 or under then it's probably a great time to do so. It's always wise to discuss these matters with your mortgage broker, as they will be able to help you make the best decision in regards to your investment.
What are your thoughts on the new NSW Budget stamp duty changes? Leave us your comments below.