NSW cuts stamp duty on new homes worth up to $800,000
27 July 2020, Written by Business News Australia
The New South Wales Government will eliminate stamp duty on newly-built homes worth less than $800,000 for new home buyers under new measures aimed at boosting the construction industry, lifting the threshold from its previous level of $650,000.
According to a report from Realestate.com.au, the median dwelling price in Sydney in mid-2019 was slightly higher than this amount at $805,000.
Most apartments would qualify for the exemption though, along with houses in some suburbs further out from the city as well as much of regional NSW.
The concession will be reduced for homes valued above $800,000 before phasing out at $1 million.
The state government forecasts more than 6m000 first home buyers will benefit from the changes, saving them thousands of dollars.
Under the changes the stamp duty threshold on vacant land will rise from $350,000 to $400,000 and will phase out at $500,000.
The change to the thresholds will only apply to newly-built homes and vacant land, not to existing homes, and will last for a 12-month period, commencing on 1 August 2020. Other purchases will continue to benefit from existing schemes.
Treasurer Dominic Perrottet said the changes would save first home buyers stamp duty of up to $31,335 on a new $800,000 home.
"The current scheme has already helped over 93,000 first home buyers since July 2017 and this will give the construction industry extra support as we face the challenges of COVID-19," Perrottet said.
"We need to ensure our building sites keep ringing with hammers and saws as that means more people working, and first home owners will save money in the process."
The NSW 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 amount of benefit a home owner could be entitled to is $32,335 if purchasing a new home and accessing the grant.
The Housing Industry Association (HIA) describes the temporary increase in the stamp duty concessions as a timely and significant decision.
"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," says the association's executive director for NSW, David Bare.
"This initiative will have positive outcomes for the housing industry and the NSW economy as a whole."
Bare said today's announcement makes sense following the release of the NSW HomeBuilder details on Saturday, and will help many first home buyers get into the property market sooner.
"Combined with the existing $10,000 first home owners grant and the $25,000 HomeBuilder grant, first home buyers in NSW should be looking to a new home as a real option to take up home ownership," he said.
"More importantly, this 12 month package will provide a much needed boost to an industry for which hundreds of thousands of people in NSW rely on for employment.
"The home building industry will play a critical part of NSW's economic recovery from COVID-19 related challenges and the NSW Government should be applauded for listening to our calls for greater support."Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Business News Australia