NSW Home Builders Bonus

The NSW Home Builders Bonus ceased to apply for contracts entered into on or after 1 July 2012.

The NSW Home Builders Bonus (HBB) was introduced to stimulate the construction of new homes in NSW. HBB provides exemptions and concessions for certain purchases of new homes, homes off the plan and vacant land on which a new home will be built (New Housing Concession).

HBB also provides a specific exemption for eligible seniors purchasing a new home as their principal place of residence (Senior's Principal Place of Residence Duty Exemption).

The New Housing Concession provides a full exemption on transactions relating to vacant land and off the plan purchases where building has not commenced. A partial concession of 25 per cent of duty payable applies
to completed new homes or off the plan purchases where construction has commenced. There is no limit to the number of new homes a person may purchase under this concession.

The Senior's Principal Place of Residence Duty Exemption provides a full exemption for eligible seniors purchasing a new home that is to be occupied as their principal place of residence. Applicants must be 65 years of age or older (or, from 1 July 2011, 55 years of age or older) and selling their current residence.

Eligibility requirements for transactions

  • To be eligible for HBB the value of vacant land must not exceed $400,000 and new homes must not exceed $600,000.

  • Agreements for sale or transfers of vacant land or a new home will be eligible for consideration under HBB where they are entered into on or after 1 July 2010 and before 1 July 2012.

  • A new home is a home that has not previously been occupied or sold as a place of residence, and includes a substantially renovated home.

  • An agreement for sale or transfer is eligible if it is an agreement for sale or transfer for the acquisition of a new home that is complete and ready for occupation.

  • For vacant land, construction must commence with the laying of foundations within 26 weeks after the agreement for sale or transfer is completed, or within any longer period allowed by the Chief Commissioner.

  • Applications for exemptions or concessions under HBB must be made within three months of the date of the agreement for sale (or transfer when there is no preceding agreement).

  • The agreement for sale or transfer must be for the whole of the land. If the land is a parcel of land on which two or more homes are built or being built, the agreement for sale or transfer must be for that part of the land that is an exclusive occupancy.

Ineligible transactions

  • A transfer made on or after 1 July 2010 that is in conformity with an agreement for sale or transfer entered into prior to 1 July 2010 will not be eligible.

  • An agreement for sale or transfer of a new home is not eligible if it replaces an agreement for sale or transfer made before 1 July 2010 that was for substantially the same property.

  • An agreement for sale or transfer will not be eligible if the new home or the land on which the new home is located, or is to be built, is intended to be used, or made available for use, for any purpose that is not ancillary to the use and occupation of the land for residential purposes (eg for a commercial, industrial or professional purpose)

Replacement agreements

An application may be made under the scheme in relation to an off the plan purchase where:

  • the off the plan purchase replaces an off the plan purchase approved under this scheme, and

  • the property is substantially the same property, and

  • the purchaser(s) are the same.

The Senior's Principal Place of Residence Duty Exemption eligibility requirements

Note: For an off the plan purchase where construction has not commenced or a vacant land purchase, seniors will be entitled to and should apply for exemption under the New Housing Concession.

The Senior's Principal Place of Residence Duty Exemption will apply where the agreement for sale or transfer is either a completed new
home purchase or an off the plan purchase where construction
has commenced.

To be eligible for this exemption:

  • all of the purchasers must be aged 65 years of age or older (or, from 1 July 2011, 55 years of age or older), or where a married couple or de facto partners are the purchasers, as long as one of them is aged 65 years of age or older (or, from 1 July 2011, 55 years of age or older)

  • the eligible senior (and spouse, if any) must move into the home within 12 months of completion of the agreement or transfer and occupy the property as their principal place of residence for a continuous period of at least 12 months

  • the eligible senior must have owned and occupied a home in NSW within the last 12 months before the date of the current agreement for sale

  • the eligible senior (and spouse if owner) must dispose of such former home in the period either prior to, or within six months after the completion of the current agreement for sale.

A person is defined as an eligible senior if:

  • the person is aged 65 years of age or older (or, from 1 July 2011, 55 years of age or older)

  • the person is an Australian citizen or permanent resident

  • neither the person, nor the person's spouse (if any) has previously had the benefit of the Senior's Principal Place of Residence Duty Exemption.

An agreement for sale is not eligible if:

  • it replaces an agreement made before 1 July 2011 and the eligible senior was under the age of 65 at the date of the replaced agreement

  • the replaced agreement was an agreement for the sale or transfer of substantially the same property.

A transfer made in conformity with an agreement for sale dated before 1 July 2011 where the eligible senior was under the age of 65 as at the date of the agreement is also ineligible.

Payment of duty

Where the 25 per cent duty reduction applies for the purchase of a completed new home, duty is payable within three months of the date that the agreement for sale or transfer is first executed.

For an off the plan purchase, duty must be paid within three months of:

  • the completion of the agreement for sale, or

  • the assignment of the whole or any part of the purchasers’ interest under the agreement for sale, or

  • the expiration of 12 months after the date of the agreement for sale,

whichever occurs first.

To finalise the processing of an off the plan purchase where construction has commenced, you can lodge with us, process on Electronic Duties Return (EDR) prior to attending settlement or process at an approved settlement room.

For more information, download NSW Home Builders Bonus - Processing an Off The Plan Purchase of a New Home Where Construction has Commenced factsheet (PDF) and our Approved Settlement Room Checklist (PDF).

How to apply

Submit your NSW Home Builders Bonus application form (ODA 065)(PDF) together with your agreement for sale or transfer. Applications must be received within three months of the date of the first execution of the agreement for sale or of the transfer (where there is no agreement).

One application is required for each transaction but separate declarations are required for each eligible senior.

Applications for exemption can be lodged at our Parramatta office or processed electronically through our EDR.

Where an application is for an off the plan purchase, a Declaration for 'Off the Plan' Purchases form (ODA 014) (PDF) must also be completed and lodged. This form is not required where the 100 per cent
exemption applies.

However, applications for a reduction in duty on off-the-plan transactions where construction has commenced must be lodged at our Parramatta office.

We may require documentary evidence to substantiate your claim for exemption/concession.

Definitions

A new home is an agreement for the sale or transfer, or a transfer, of land that is the site of a new home that is complete and ready for occupation.

An off the plan purchase is an agreement for the sale or transfer of land intended to be used as the site of a new home, which is to be built before completion of the agreement.

A vacant land purchase is an agreement for the sale or transfer, or a transfer, of vacant land that is intended to be used as the site of a new home and which is not an off the plan purchase.

A substantially renovated property is For purposes of this exemption, a substantially renovated home is a renovated home when:

  1. that is new residential premises within the meaning of section 40-75(1)(b) of the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth

  2. that, as renovated, has not been previously occupied or sold as a place of residence.

Under that legislation, 'substantial renovations' of a building are defined as renovations in which all, or substantially all, of a building is removed or replaced. The renovations may, but need not, involve the removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases.

Last updated: 17 March 2016