The NSW Government this week has announced significant changes to stamp duty to be paid by first home buyers of newly built homes.
Property Council acting NSW executive director Belinda Ngo said the NSW Government’s announcement represents a “win-win” for first-home buyers and the housing construction sector. The changes in stamp duty are not only targeted at assisting first home buyers enter the property market but also support the construction of new homes
From 1 August 2020, any new home purchased by a first home buyer, with a price equal to or under $800,000, will qualify for a full stamp duty exemption. Under these reforms, for a new home purchase of $800,000, the purchaser will receive a stamp duty saving of $31,335.
For new home purchases above $800,000 but equal to or less than $1,000,000, increased stamp duty concessions will apply. Any purchase above $1,000,000 will not receive any stamp duty relief.
Further, the stamp duty threshold on vacant land will increase from $350,000 to $400,000 with increased stamp duty concessions on purchases from $400,000 to $500,000.
The NSW Government has predicted that over 6000 first home buyers will benefit from the changes.
These reforms are expected to remain in force for 12 months, ending 1 August 2021 and are made available for first home buyers in addition to the recently introduced $10,000 First Home Owner Grant, discussed here.
The NSW Government has provided the following indicative table that outlines the changes and savings for eligible first home buyers:
While NSW Premier Gladys Berejiklian has stated that “Thousands of people will see their bank balances benefit from this change – it will help get more keys into more front doors of more new homes,”, not all are so confident. Many have sighted the difficulty of purchasing a new home in greater metropolitan Sydney for less than $800,000 meaning the reforms may have little impact.
The changes comes after the NSW Government’s yearlong tax review proposed that State Governments should work with the Commonwealth to abolish inefficient taxes including stamp duty and recoup the losses through broad-based land taxes and raising the rate GST.
Only time will tell if the reforms to stamp duty can provide the much needed boost to the State’s real estate and construction sectors or if by providing further incentives it will add to the housing affordability issue in NSW and particularly in Sydney.
Henry William Lawyers can assist with any related enquires. Feel free to contact our people:
Ron Zucker +61 410 590 111
Vincent Tripodina +61 408 228 108
Chelsea Woodward +61 404 065 899
Anna Polhill +61 431 174 352