First-home-buyers of newly constructed properties in New South Wales are set to save up to $31,335 as the government in that state raises the threshold above which stamp duty is applied to new homes.
In a joint announcement, NSW Premier Gladys Berijiklian and Treasurer Dominic Perrottet have announced temporary amendments to the state’s stamp duty regime.
Under the changes:
- The threshold above which stamp duty will be charged on newly constructed homes for first-home buyers will increase from $650,000 to $800,000 and will reduce on higher levels before phasing out at $1 million.
- The stamp duty threshold on vacant land will rise from $350,000 to $400,000 and will phase out at $500,000.
The changes will apply to new or newly constructed homes and will be in force for twelve months beginning 1 August 2020.
The changes will not apply to established homes.
The government expects that up to 6,000 first-home buyers will benefit from the changes, which will deliver maximum savings of $31,335 on homes worth $800,000.
The Government will also continue to offer a $10,000 First Home Owner Grant, which is available to people buying a new first home worth no more than $600,000 or buying land and building a new first home worth no more than $750,000 in total.
This means the maximum benefit a home-owner could derive is $32,335 on a new home purchase if purchasing a new home and accessing the grant.
In a statement, Berijiklian said the change would support new home construction and create jobs as part of the Government’s COVID-19 Recovery Plan.
“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,” Berijiklian said.
“It will also boost housing construction across NSW and support jobs in the building industry at a time when we need them more than ever before.”
Building industry groups welcomed the move.
“Today’s announcement is a very welcome move as HIA has been seeking changes to the stamp duty arrangements to better reflect the price of new homes in NSW and in particular in Sydney,” said David Bare, HIA (Housing Industry Association) Director NSW.
“This initiative will have positive outcomes for the housing industry and the NSW economy as a whole.”
Urban Taskforce CEO Tom Forrest agreed.
Forest called on the Federal Government to apply the new thresholds to the HomeBuilder package.
“Today the Commonwealth Treasurer called for Dominic Perrottet to put his cards on the table. Unbeknown to Josh Frydenberg, the NSW Government had already taken the decision to slash stamp duty on newly built homes worth up to $800,000,” Forrest said.
“This will make a big difference to the struggling property market and to new buyers”,
“The problem with stamp duty and payroll tax is they are distortionary. The have the effect of creating a bias in the property market which slows down property transactions and payroll tax is simply a tax on employment – it is nuts.
“Today’s announcement to increase the stamp Duty threshold from $650,000 to $800,000 is recognition by Treasurer Perrottet that housing prices are higher is Sydney than in the rest of the nation. The Urban Taskforce calls on the Commonwealth to apply these new thresholds to the HomeBuilder package and make it relevant to the biggest market in the nation – that of Greater Sydney.”