In brief - You have six months from settlement to commence
This is an urgent reminder for builders and others who have
acquired vacant land under the Home Builders Bonus (HBB) stamp duty
It is a condition of the exemption that you start building
within 26 weeks of settlement.
If you do not, the Commissioner may require you to pay the stamp
duty on the property.
How is "commencement of construction" defined by the
Office of State Revenue?
If you received the exemption, construction of the proposed
dwelling must start no later than 26 weeks after the settlement
The NSW Office of
State Revenue considers pouring of the slab or construction of
the foundations as commencement of construction. It does not
consider pre-construction inspections, surveys or reports to be
commencement of construction.
There is no time frame for the dwelling to be completed.
What to do if commencement of construction has been
If there is a delay in the commencement of construction,
application can be made to the Commissioner for an extension of the
construction commencement date.
The application for an extension of the construction
commencement date can be made by letter to the Commissioner
outlining the reasons for the delay. Reasons for delay can be such
delay in approval from the relevant consent authority
delay in commencement due to inclement weather
any other delays which are beyond the control of the
The letter should also outline the length of the extension being
The granting of an extension of the construction commencement
date is at the absolute discretion of the Commissioner.
What to do if construction will not commence
If for any reason the intended construction on the subject
vacant land will not proceed and the HBB stamp duty exemption has
been obtained, the owner of the subject vacant land is no longer
eligible for the HBB stamp duty exemption. Such situations
the land remaining owned but vacant for a period of time
exceeding 26 weeks from the settlement date with no intention of
building a dwelling
the land being onsold to a third party as vacant land
In such situations, the recipient of the HBB stamp duty
exemption must relodge the purchase contract for sale which had
been stamped with the HBB stamp duty exemption with the Office of
State Revenue for reassessment and stamping.
The stamp duty payable in relation to the reassessed contract is
the stamp duty which would have been payable on the purchase price
but for the HBB stamp duty exemption, plus interest.
The interest is calculated from the date the duty would have
been due (normally three months from the contract date) up to the
date of actual payment of the duty. Application can be made to the
Commissioner to waive the interest. Once again this is at the
absolute discretion of the Commissioner.
The documents to be provided to the Office of State Revenue when
lodging for stamp duty reassessment are:
original contract for sale stamped with HBB stamp duty
copy of the originally stamped transfer
cheque for the stamp duty amount
letter setting out reasons for non-commencement and requesting
that interest on the stamp duty be waived
If HBB exemption is lost on multiple lots, stamp duty may need
to be aggregated
If you have purchased a number of lots from the same vendor at
the same time and received HBB exemptions on all the lots, just
remember that if more than one lot loses the HBB exemption, the
stamp duty payable on those now assessable lots may need to be
Registered builders are generally eligible for an exemption from
aggregation of stamp duty, subject to the lodgement of the relevant
declaration form. This form should be lodged at the same time as
the application for reassessment.
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