On June 1st, NSW premier Gladys Berejiklian announced that first home buyers across the state will be exempt from paying stamp duty on existing and new homes up to $650,000. There will also be stamp duty concessions for properties between $650,000 and $800,000.
The changes, which will come into effect 1st July 2017, also include a $10,000 grant for builders of new homes up to $750,000, and purchasers of new properties worth up to $600,000. The previous $5000 New Home Grant Scheme will end.
As part of the reform to address housing affordability, the government has said that the stamp duty charged on lender’s mortgage insurance will also be abolished. For an individual with $50,000 in savings looking to purchase a $800,000 home, this could mean saving approximately $2900.
In an effort to slow down the competition first home buyers face, foreign investors will now pay double the stamp duty surcharge – from 4% to 8% – and land tax will increase from 0.75% to 2%.
To decelerate investor competition for first home buyers in entering the market, the government will axe the ability for investors to defer paying stamp duty on residential off the plan purchases,
In addition, the State government has committed to increasing the supply of land as a means to tackle the current constraints, adding that $3 billion will be invested in infrastructure.
The exemption, is said to benefit about 25,000 first home buyers every year, with an average of $8000 worth of savings for new or existing homes.