FIRST home buyers in New South Wales will be exempt from paying stamp duty on newly built homes below $800,000, as part of the government’s strategy to support the building and construction industry.
Under the changes the threshold above which stamp duty will be charged on new homes for first home buyers will increase from the current $650,000 to $800,000, with the concession reducing on higher values before phasing out at $1 million.
It is expected more than 6000 first home buyers will benefit from the changes. Furthermore, the threshold on vacant land will rise from $350,000 to $400,000 and will phase out at $500,000.
The change 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.
Premier Gladys Berejiklian said the change to stamp duty thresholds would support new home construction and create jobs.
“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,” Berejiklian 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.”
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.
“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,” Perrottet said.
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.
As a result, the maximum benefit a home owner could be entitled to is $32,335 if purchasing a new home and accessing the grant.
Tax threshold changes:
|Property type||Existing stamp duty amount for eligible first home buyers||New stamp duty amount for eligible first home buyers||Saving|
|Vacant Land $350,000||$0||$0||no change|
|Vacant Land $400,000||$7793||$0||$7793|
|New home $650,000||$0||$0||no change|
|New home $700,000||$10,445||$0||$10,445|
|New home $800,000||$31,335||$0||$31,335|
|New home $900,000||$35,835||$20,168||$15,668|
|Existing home $650,000||$0||$0||no change|
|Existing home $800,000||$31,335||$31,335||no change|
Moody’s Investors Service vice president Saranga Ranasinghe said the move is positive particularly for Stockland.
“The pausing of stamp duty in New South Wales for first home buyers of new homes under $800,000 is credit positive for the construction sector and particularly for Stockland Group (A3 stable). Stockland is the largest master planned communities builder in Australia and caters to the owner-occupier segment of the market, where around 49% of sales are made to first home buyers.
“The temporary axing of stamp duty, along with the previously announced $25,000 HomeBuilder grant, will further support the first home buyer segment of the market. Residential construction has been soft since peaking in June 2018, and we expect the stimulus measures to partially mitigate weakness in the single dweller segment of the residential market. The Reserve Bank of Australia has also provided support through rate cuts, and banks through the extension of mortgage repayment holidays, although reduced migration continues to weigh on housing demand.” Ranasinghe said.