Thinking of building your dream family home or buying a newly built abode? You could save up to $22,490 on stamp duty thanks to the NSW Home Builder’s Bonus. Natasha Saroca reveals how to maximise your savings under the new program.
Whether you are a first homebuyer taking that first step on the property ladder, a retiree looking to downsize, an investor scoping out new dwellings to add to your portfolio or are thinking about building a new family home, expect to save thousands on stamp duty following the launch of the NSW government’s new Home Builder’s Bonus initiative.
Introduced as part of the state government’s budget for 2010-11, the Home Builder’s Bonus offers stamp duty exemptions and concessions on vacant
land, new homes purchased off the plan before construction, and newly constructed dwellings. As stamp duty — a tax imposed on certain documents and transactions related to the purchase of a home or block of land — is calculated on the purchase price of a property, it is often one of the largest additional expenses that buyers face.
Created to boost the residential building industry and address NSW’s housing
shortage, the Home Builder’s Bonus also offers big savings for those who wish to take that next step closer to being the proud owner of a new home. And unlike previous programs introduced by the government, such as the First Home Plus Scheme and First Home Owner Boost Scheme, the Home Builder’s Bonus is not limited to first-timers but open to all buyers, so everyone is a winner! Read on for our guide to the Home Builder’s Bonus.
If you’re thinking of buying a new home off the plan (before construction) or a houseand- land package worth up to $600,000, you will be exempt from paying stamp duty — a saving of up to $22,490 — under the Home Builder’s Bonus. Stamp duty has also been cut to zero for those buying vacant land worth up to $400,000. To be eligible for the exemptions, homes purchased off the plan between July 1, 2010, and July 1, 2011, must be completed by December 31, 2012. All agreements entered into between July 1, 2011, and July
1, 2012, must be completed by December 31, 2013.
Time limits also apply for those buying vacant land — the home’s foundations
must be laid within 26 weeks of entering a purchase agreement and construction
must be complete within 18 months after the initial work begins. Under construction Has building commenced on your new family home or maybe you’ve set your sights on a recently constructed residence? Although you’re not eligible for the full stamp duty discount available to those buying a home pre-construction, you can still enjoy a 25 per cent stamp duty cut —
a possible saving of up to $5623 — when buying a home that’s under construction or newly built and valued at $600,000 or less.
First-home buyers also qualify for the Home Builder’s Bonus and, when combined with the NSW government’s $7000 First Home ners Grant Scheme (FHOGS), can benefit from savings of up to $29,490, the maximum amount available for those entering the property market. To qualify, first-home buyers must meet criteria set out by the Office of State Revenue for the Home Builder’s Bonus, as well as the FHOGS.
If you’re over 65 and all of your children have flown the coop, perhaps it’s time to downsize to a smaller, more comfortable abode. To encourage empty-nesters to sell their primary residence and purchase a new home that better suits their needs and lifestyle, homeowners aged over 65 will pay zero stamp duty on homes worth up to $600,000 regardless of what stage construction is at. To qualify for the exemptions, senior downsizers must live in their new home for at least 12 months. Time restrictions relating to the construction of off-the-plan purchases also apply (see above).
The Home Builder’s Bonus is available for two years from July 1, 2010, to June 30, 2012. For more information, visit www.osr.nsw.gov.au.