NSW Government Encourages ‘Empty Nesters’ to Downsize

For a number of years, the Real Estate Institute of NSW has been lobbying the NSW Government to extend the principal place of residence stamp duty exemption to ‘seniors’ between 55 and 65 years of age. Currently, the exemption is only available to persons who are 65 years of age or older.

REINSW’s Retirement Assistance Purchase Plan (RAPP) seeks an exemption from stamp duty for empty nesters wishing to relocate to smaller accommodation, having the effect of increasing the supply of larger homes in established suburbs, better utilizing existing infrastructure & improving the affordability of family homes.

With the Duties Amendment (Senior’s Principal Place of Residence Duty Exemption) Bill 2011 the NSW Government has moved to act on its promise to reduce the minimum age requirement for the seniors transfer duty exemption for eligible sales between 1 July 2011 and 30 June 2012.

The Bill has been passed by NSW Parliament and is currently awaiting assent. The Bill is proposed to come into effect on 1 July 2011.

It is pleasing that the NSW Government has listened to REINSW and is taking steps to encourage empty nesters to downsize.

The exemption will apply to persons aged 55 years or older where:
a) the agreement for sale or transfer is entered into on or after 1 July 2011, or
b) the transfer occurs on or after 1 July 2011 (other than a transfer made in conformity with an agreement for sale or transfer entered into before 1 July 2011).

There will be an anti-avoidance provision making an agreement for sale or transfer ineligible if:
a) it replaces an agreement made before 1 July 2011, and
b) the replaced agreement was an agreement for the sale or transfer of substantially the same property.

To be eligible for the exemption, among other things, the dutiable value of the property must not exceed:
a) $600,000 in the case of a new home purchase or an off the plan
purchase, or
b) $400,000 in the case of a vacant land purchase.

Source: REINSW