19 June 2009
Treasury's got a plan - the Housing Construction Acceleration Plan in the 2009-2010 NSW budget
In delivering the budget earlier this week the Treasurer, Eric Roozendaal delivered what he described as "a budget to support jobs, rebuild the surplus, and protect services for NSW families."
To stimulate the housing construction industry he introduced what is called the Housing Construction Acceleration Plan. At the heart of the plan is a 50% concession on stamp duty payable on the purchase of newly constructed dwellings where the purchase price is up to an amount of $600,000.
Key features of the Plan are set out below.
The Plan is not limited to purchasers who intend to be owner occupiers. The Plan applies only to agreements for the purchase of a new dwelling entered into from 1 July 2009 but before 1 January 2010. There is no limit on the number of new homes a person can purchase to qualify for the concession but the individual value of any particular property must not exceed $600,000. Note that for the purposes of the Plan, value is taken to be the sale price or the market value, whichever is higher.
Stamp duty normally payable on a property worth $600,000 amounts to $22,490. This means if between 1 July 2009 and 31 December 2009 you enter into a contract to purchase a new dwelling there could be a potential saving of up to $11,245 for each property. The potential saving for each property could be slightly less where multiple purchases are aggregated under s.25 of the Duties Act 1997.
As the Plan is designed to support growth and construction jobs in the housing sector the Plan only applies to new dwellings. A new dwelling is one which has not previously been occupied or sold as a residence and unless it is an off the plan purchase, the new dwelling must be complete and ready for occupation. An "off the plan" purchase will be eligible only if the contract says the purchase must be completed on a date before 30 June 2011 or if the purchase is actually completed before 30 June 2011.
It can apply to a substantially renovated dwelling if that dwelling is classed as the sale of new residential premises within the meaning of the GST Act and the dwelling as renovated has not been previously occupied or sold as a principal place of residence.
If you have already exchanged contracts to purchase a new dwelling, it is not possible to simply rescind that contract and enter into a new contract for the same property just so you can get the benefit of the concession.
The Treasurer said the Plan "will benefit anyone buying a new dwelling including empty nesters; growing families who need more room and mum and dad investors seeking the security of bricks and mortar." The Government expects the Plan will cost $64 million in lost stamp duty revenue but will boost construction of new homes in New South Wales by about 15% next financial year.
With one exception there is no limit to the class of purchasers who are entitled to apply for the concession. It applies to non-citizen/non-resident purchasers, corporate purchasers, Government purchasers and individuals.
Specifically excluded from the Plan are purchasers who would be eligible under either the First Home Owners Grant Scheme or for First Home Plus on the purchase. The budget however extends the First Home Buyers Supplement to 30 June 2010 which provides an additional $3,000.00 to first home buyers purchasing newly constructed dwellings.
Full details of the Plan are listed on both the Treasury\'s and Office of State Revenue\'s websites.
This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.