NSW Stamp duty exemption set to save first home buyers thousands
The NSW first home buyer’s assistance scheme has been underway since July 1st, meaning now is a great time to start looking for your first home in New South Wales. Eligible first home buyers in NSW are now exempt from stamp duty on new and existing properties up to $650,000, while also being given significant discounts on properties up to $800,000.
How the stamp duty exemption works
New and Existing
Eligible first home buyers purchasing in NSW looking to make their first step onto the property ladder will be able to do so with much greater ease. First time home buyers, purchasing an existing home, won’t have to pay any stamp duty up to a cut off of $650,000. Prior to this exemption, the stamp duty on a home at this price would have added over $24,000 to the bill.
For properties over the $650,000 threshold, there will be significant stamp duty savings for properties up to $800,000.
For example, a first home buyer who purchases a new or existing home for $660,000 after 1st of July will have saved $23,100 in stamp duty or a first home buyer who purchases a new or existing home for $750,000 after 1st of July will have saved $8,250 in stamp duty.
Eligible first home buyers purchasing in NSW looking at buying a vacant block of residential land to build their home on will pay no duty on vacant land valued up to $350,000, and will receive concessions on duty for vacant land valued between $350,000 and $450,000. For example, vacant block of residential land to build your home on was purchased for $400,000 will have saved $5,620 in stamp duty or vacant block of residential land to build your home on was purchased for $375,000 will have saved $8,430 in stamp duty.It looks like NSW might be the ideal place for home buyers to take their first step into home ownership.
Why is the stamp duty concession happening?
The reason behind this overhaul of tax duty requirements was to ensure that home ownership remains within reach for people in NSW.
Foreign buyers have been flagged as a major reason for the housing shortage in Sydney, and rightly so with foreign buyers purchasing a quarter of NSW newly-constructed properties. In an attempt to wrestle the power out of the hands of foreign investors and give it back to Australian hopefuls, there has been increases in offshore investor surcharges. The stamp duty surcharge for foreign investors has gone from 4 to 8 per cent, while land tax has gone from 0.75 to 2 per cent.
In addition to this, these investors can no longer defer stamp duty for 12 months if buying off the plan. Ultimately, the new package gives first home buyers opportunity to get a leg up on investors.
But wait, that’s not all
On top of the stamp duty exemptions and increase duties for foreign investors, there is also a $10,000 grant available for those first home buyers building a new dwelling (up to the value of $750,000) and those purchasing a new home which is defined as a home that has not previously been occupied or sold as a place of residence (up to the value of $600,000). Coupled with the stamp duty exemptions, this can equate to a huge saving and should see a number of first home buyers taking the plunge in the upcoming months.
This grant has been put in place to address the low supply of houses contributing to the increasing rise in property values, and replaces the $5,000 grant previously available to both buyers and investors for building a new home, a home off the plan or vacant land. In addition to the grant, the state government will also be implementing measures to fast-track approvals for new builds.
If the time is right for you to make your entry into the realm of property ownership, Beyond Bank has a range of home loan solutions that will help you get there. For more information, or to begin the application process, contact Beyond Bank today.