- 31 Jul, 2017

NSW Scraps Stamp Duty for First Home Buyers

New South Wales and other Australian states have scrapped stamp duty for first home buyers from July 1. Capped to a specified home value, the exemptions will shave around $25,000 off the price of a home valued at $650,000. Consequently, these incentives will encourage more first home buyers to enter the market.

The NSW Housing Affordability Package

Looking to increase housing affordability, the NSW government has introduced new first home buying incentives. The new changes can save a first home buyer in this state up to $35,000. New incentives are:

  • No first home buyer stamp duty on homes under $650,000.
  • $3 billion increase in infrastructure spending to boost housing supply.
  • Stamp duty discount for first home buyers purchasing homes under $800,000.
  • Duty abolishment on lenders mortgage insurance for all home buyers.
  • Foreign investor stamp duty surcharge to increase to 8 percent.
  • Overseas investment land tax to rise to 2 percent.

Savings for NSW First Home Buyers

Savings for NSW first home buyers are extensive. According to recently published NSW Government data, these are as follows:

First Home Buyer Savings
All Dwellings
Purchase Price Usual Stamp Duty New Dwelling Saving Established Dwelling Saving Foreign Investor Surcharge and Stamp Duty
$500,000 $17,990 $28,768 $18,768 $57,990
$550,000 $20,240 $21,451 $21,451 $64,240
$600,000 $22,490 $24,361 $24,361 $70,490
$650,000 $24,740 $26,857 $26,857 $76,740
$700,000 $26,990 $18,786 $18,786 $82,990
$710,000 $27,440 $17,172 $17,172 $84,240
$750,000 $29,240 $10,950 $10,950 $89,240
$775,000 $30,365 $6,922 $6,922 $92,365
$800,000 $31.490 $2,896 $2,896 $95,490

Source: NSW Government

 

Of course, these savings may vary depending on individual circumstances. Therefore, contact a mortgage broker or the first home buyer scheme directly to determine your actual savings.

First home buyer savings will increase housing affordability. Plus, they won’t overinflate housing prices.

By increasing foreign investment costs, the government is also limiting first home buyer competition. Thus, more properties should be available for purchase.

Foreign NSW Buyers

By doubling the cost of stamp duty and land tax, the government is limiting foreign investment. Another change includes the lifting of the stamp duty discount for investors buying off-the-plan.

Increase in NSW Supply

The Government are introducing a $3 billion infrastructure package in the new financial year. Including up to $500 million for extra council borrowing, this package will help accelerate the delivery of housing. Plus, a $369 million allocation over the next three years will help build more local roads, community centres and public spaces. These improvements will:

  • Encourage home buying.
  • Make more properties available.
  • Increase the quality of lifestyle for residents.
  • Decrease commuting times.

Other State First Home Buying Incentives

Victoria and Western Australia have also reduced stamp duty for first home buyers. Consequently, these new incentives are as follows:

Victoria

  • New scheme named ‘Homes Vic’.
  • Property under $600,00 is stamp duty exempt for first home buyers.
  • A stamp duty discount applies to homes priced between $600,000 and $750,000.
  • Couples must earn under $95,000 to be eligible.
  • Singles cannot earn over $75,000.
  • A deposit of 5 percent gets the first home buyer started.
  • When the home sells, the government take a 25 percent share of the equity.

Western Australia

  • The scheme called KeyStart has altered.
  • Changes include income limit increases – singles rose to $90,000; couples to $115,000 and families to $135,000.
  • Concessional stamp duty rate applies to first home buyers up to $530,000 for house and land and $400,000 for vacant land.

Are you looking to buy your first home? Then contact eChoice. We can help you plan. Plus, our brokers have access to 100s of products, so we’ll find you a competitive mortgage.


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