In brief
The NSW state budget delivered in June 2010 announced certain exemptions and concessions to stamp duty on property, as well as a new tax on property purchases.
Home Builders Bonus (HBB)
The budget reveals that stamp duty on property will undergo significant changes, which are to be set out in the State Revenue Legislation Amendment Bill 2010.
The government is introducing the NSW Home Builders Bonus in an attempt to stimulate the construction of new homes in NSW by providing exemptions and concessions for certain new home purchases, off the plan purchases, vacant land purchases and purchases by eligible seniors of newly constructed homes as their principal place of residence.
From 1 July 2010, there will be no stamp duty for vacant land offthe-plan purchase contracts up to $600,000 entered into before 1 July 2012.
Furthermore, from 1 July 2010, there will be a 25% stamp duty reduction for contracts of homes under construction or newlycompleted homes worth up to $600,000, as long as the contract is entered into between 1 July 2010 and 1 July 2011 and the home is completed by 31 December 2012, or the contract is entered into between 1 July 2011 and 1 July 2012 and the home is completed by 31 December 2013.
Stamp duty exemption for eligible seniors
From 1 July 2010, there will be no stamp duty to be paid by eligible seniors who are purchasing new homes worth up to $600,000 as their principal place of residence. An eligible senior is defined as being someone who is 65 years of age or older, is an Australian citizen or permanent resident and neither that person nor their spouse has previously had the benefit of this exemption.
New tax on purchases
The budget has also introduced a new tax on property purchases. Buyers will now have to pay $190 for a property valued at less than $500,000.
There will be a tax of 0.2% of the value for a property valued between $500,000 and $1 million and a tax of 0.25% of the value for a property valued at over $1 million.
The tax of $190 reflects the current flat fee for registration of a transfer of land at the Department of Lands. Presently, the fee is $190 irrespective of the consideration paid or the value of the property being transferred. Other states have a sliding scale for calculation of registration fees for transfers of land. It is suggested that the introduction of this new tax is an attempt to bring NSW in line with other states.
For more details on the property tax on purchases please see Catherine Hallgath's article in this month's Swaab Connect.
Swaab was recently named a 2009 Winner in the ALB Employer of Choice awards, and was winner 'Best Law Firm in Australia (Revenue < $20m)' and 'Attribute Award for Exceptional Service (Australia Wide)' in the 2008 BRW- Client Choice Awards.
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