Changes to the NSW Home Builders Bonus were passed in the State Parliament late last month in the Duties Amendment (NSW Home Builders Bonus) Bill 2010. The NSW Home Builders Bonus proposes zero stamp duty when dwellings under $600,000 are bought before construction begins and a 25% stamp duty discount when construction has already started. Seniors buying new homes would also pay zero stamp duty.

The Bill initially stated that building on vacant land was to commence “within 26 weeks after the agreement for sale or transfer is entered into”. Also, construction was required to be completed within 18 months for buyers to be eligible for the stamp duty concession.

The amendments respond to industry complaints by extending the time limit within which apartments need to be completed to receive the exemption.

The commencement clause has been amended to read “within 26 weeks after the agreement for sale or transfer is completed” as the date of settlement is a more appropriate trigger. The 18 month completion clause has now been removed completely from the provisions.

The changes allow developers who purchase partially completed sites to still sell them “off-the-plan” and receive the benefits.

Some developers claim the Bill will push up the price of apartments by increasing the demand without dealing with the undersupply of dwellings. Faster approval process to speed up supply would be more helpful than measures aimed at increasing demand.