Big changes underway due to loose-fill asbestos insulation!
The NSW Government is currently running a Voluntary Purchase and Demolition Program for homes and commercial properties affected by loose-fill asbestos insulation.
During the 1960s and 1970s loose-fill asbestos insulation was sold as ceiling insulation. An ACT-based company known as ‘Mr Fluffy’, installed this insulation in approximately 1000 homes in the ACT and NSW.
Now, some decades down the track, we are more educated around the health risks posed by asbestos. To that end, the NSW Government has determined that the best way to remove the health risks of this insulation is through the ‘demolition, comprehensive site remediation and disposal’ of affected properties.
Enter the Voluntary Purchase and Demolition Program which is designed to solve the problem. Fundamentally this initiative involves the NSW Government purchase of affected premises (this can be the premises and land, or just the premises itself), for fair market value. The affected premises are demolished, leaving the land free for new asbestos free development. The whole process is overseen by the Loose-fill Asbestos Implementation Taskforce.
If you own investment properties, the NSW Government will purchase the premises and land at market value, demolish the premises and remediate the land before selling it. Although other options are available to homeowners, this is the only option suitable for owners of multiple dwelling units or strata properties.
One of the main concerns that prospective sellers have had with this initiative is around the stamp duty that they would inevitably have to face when purchasing another home.
The NSW Government was proactive in alleviating these concerns and consequently amended the Duties Act 1977 (NSW) (Act), to add ‘Division 5, Part 8 – Concession for persons who have transferred property affected by loose-fill asbestos insulation to State’. Pursuant to s104E of the Act, where the owner of a residential property that will be, or has been, acquired by an authority of the State due to the land being affected by loose-fill asbestos insulation – the owner will be entitled to a duty concession for the purchase of their next property.
If the duty concession is granted, any duty chargeable under the Act will be reduced by the amount of duty that would have been chargeable to the Authority of the State. This ensures that an owner who, for example, sold their $500,000 property to the Authority of the State, isn’t exempt from paying stamp duty on the purchase of a $2,000,000 property. In those circumstances, they would receive a concession in the amount of duty that ought to have been paid with respect to the original $500,000 property.
Free sample testing is currently underway. To be eligible for the Program, homeowners must be registered for testing by 1 August 2016.
For more information on the Voluntary Purchase and Demolition Program click here.
For more information on buying or selling your home please read our Plain English Guide to Buying Residential Real Estate and our Plain English Guide to Selling Residential Real Estate.
If you have any questions about buying or selling your home please contact: