NSW Housing Construction Acceleration Plan (HCAP) – Stamp Duty Discount
24 September 2009
Information provided for The Investor Club (TIC) membes
The NSW Government has introduced the NSW Housing Construction Acceleration Plan (HCAP) from 1 July 2009 which is a housing stimulus for people outside the first home buyer market, cutting stamp duty by 50 per cent for people buying newly constructed properties or new home in NSW with a value not exceeding $600,000.00.
A new home is defined as a home that has not previously been occupied or sold as a place of residence, and includes a substantially renovated home.
It will therefore be important for the Investor Club members to be aware whether they may be eligible for the new HCAP stamp duty discount and to ensure to check this with their solicitor when buying property in New South Wales.
The Investor Club members who are eligible for the HCAP stamp duty discount will need to sign a Statutory Declaration that the property is a new home and has never been occupied, so purchaser’s will need to be very careful to ensure that the property has never been occupied prior to exchange of contracts, and this is the purchaser’s responsibility to ensure this is correct. This means the Investors Club and the Vendor must be made aware that the property should not be leased (or even merely occupied by the builder) prior to exchange of contracts, and that the contract must say the property is sold as “Vacant Possession” and not “Subject to a tenancy”.
The Office of State Revenue (OSR) have confirmed for us that so long as the contract is exchanged as noted above with Vacant Possession, then should the Vendor and Purchaser agree thereafter that the property is then to be tenanted and a tenant moves into the property after exchange of contracts and before settlement, then the purchaser will still be eligible for the stamp duty discount. It would also be wise for members to seek a “Vendor Statement” from the Vendor, if they will provide one, to the effect that the property is eligible for the HCAP stamp duty discount. We are aware that some Vendors may not agree to provide this statement for the HCAP stamp duty discount. Members should also seek and keep a copy of the Certificate of Occupation for the building as evidence that the building is in fact a new building.
The NSW Office of State Revenue when it comes to providing such stamp duty discounts and exemptions is very vigilant. Evidence will often be required should the OSR come knocking on your door to check your eligibility for the stamp duty discount down the track. First Home Buyer’s have been known to have to pay back the First Home Owners Grant (the Grant) of stamp duty because they could not provide evidence that they had lived in the property for the six (6) out of the first twelve (12) months from the completion date as required by the conditions of the Grant.
So members don’t get caught, and make sure you retain your evidence that the property is a new home to provide evidence that you are entitled to the HCAP stamp duty exemption and that the property has not previously been occupied or sold as a place of residence.
Disclaimer: The information in this article is correct as at 17 September 2009. This information is not to be taken as legal advice and at all times we recommend you seek independent legal advice regarding your own individual circumstances from your legal representative.
Call us now for a FREE consultation on 02 9984 8788.
Information provided for The Investor Club (TIC) membes
The NSW Government has introduced the NSW Housing Construction Acceleration Plan (HCAP) from 1 July 2009 which is a housing stimulus for people outside the first home buyer market, cutting stamp duty by 50 per cent for people buying newly constructed properties or new home in NSW with a value not exceeding $600,000.00.
A new home is defined as a home that has not previously been occupied or sold as a place of residence, and includes a substantially renovated home.
It will therefore be important for the Investor Club members to be aware whether they may be eligible for the new HCAP stamp duty discount and to ensure to check this with their solicitor when buying property in New South Wales.
The Investor Club members who are eligible for the HCAP stamp duty discount will need to sign a Statutory Declaration that the property is a new home and has never been occupied, so purchaser’s will need to be very careful to ensure that the property has never been occupied prior to exchange of contracts, and this is the purchaser’s responsibility to ensure this is correct. This means the Investors Club and the Vendor must be made aware that the property should not be leased (or even merely occupied by the builder) prior to exchange of contracts, and that the contract must say the property is sold as “Vacant Possession” and not “Subject to a tenancy”.
The Office of State Revenue (OSR) have confirmed for us that so long as the contract is exchanged as noted above with Vacant Possession, then should the Vendor and Purchaser agree thereafter that the property is then to be tenanted and a tenant moves into the property after exchange of contracts and before settlement, then the purchaser will still be eligible for the stamp duty discount. It would also be wise for members to seek a “Vendor Statement” from the Vendor, if they will provide one, to the effect that the property is eligible for the HCAP stamp duty discount. We are aware that some Vendors may not agree to provide this statement for the HCAP stamp duty discount. Members should also seek and keep a copy of the Certificate of Occupation for the building as evidence that the building is in fact a new building.
The NSW Office of State Revenue when it comes to providing such stamp duty discounts and exemptions is very vigilant. Evidence will often be required should the OSR come knocking on your door to check your eligibility for the stamp duty discount down the track. First Home Buyer’s have been known to have to pay back the First Home Owners Grant (the Grant) of stamp duty because they could not provide evidence that they had lived in the property for the six (6) out of the first twelve (12) months from the completion date as required by the conditions of the Grant.
So members don’t get caught, and make sure you retain your evidence that the property is a new home to provide evidence that you are entitled to the HCAP stamp duty exemption and that the property has not previously been occupied or sold as a place of residence.
Disclaimer: The information in this article is correct as at 17 September 2009. This information is not to be taken as legal advice and at all times we recommend you seek independent legal advice regarding your own individual circumstances from your legal representative.
Call us now for a FREE consultation on 02 9984 8788.