NSW Government’s plan for first home buyers

Under increasing pressure to improve housing affordability and availability, in 2017 the NSW Government released a package of measures designed to support first home buyers.

These new measures offer savings to first home buyers up to $34,360 and are seen as a significant benefit. However, foreign investors who invest in NSW housing will be required to pay more in state taxes.

Some of the broader policies to improve access to affordable housing include:

  • Increasing grants and concessions available to first home buyers;
  • Increasing the supply of reasonably priced housing; and
  • Speeding up the delivery of necessary infrastructure to support growth and new communities.

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Recognising obstacles most first home buyers face

Recognising that first home buyers face a range of obstacles to getting into the market, such as rising housing prices, onerous deposits and competition from local and overseas investors, the state government introduced a range of measures which came into place from 1st July 2017.

Briefly, these measures include:

  • Abolishing all stamp duty for first home buyers on existing and new homes up to $650,000, and stamp duty discounts for homes up to $800,000, which should provide savings of up to $24,740;
  • Abolishing the stamp duty charged on lenders’ mortgage insurance;
  • A First Home Owners Grant of $10,000 for builders of new properties worth up to $750,000 and purchasers of new properties worth up to $600,000;
  • Property buyers who are purchasing a home they plan to live in off the plan will still be entitled to a 12-month delay in the payment of stamp duty.  Meaning stamp duty will be payable within three months of settlement or 15 months after contract date or whichever comes first. This is available irrespective of whether the purchaser is a first home buyer or not;
  • The 12-month deferral of stamp duty for residential off-the-plan purchases by investors has been abolished.

Under these measures, foreign investors are the hardest hit. They receive a doubling of the Foreign Investor Surcharge from four percent to eight percent, and a rise from 0.75 percent to two percent on land tax.

More detailed information can be found on the NSW Government’s housing affordability package at www.nsw.gov.au/housingaffordability

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