Stamp duty suspended for some new NSW home buyers
The state will look to build its way out of the COVID crisis, with stamp duty temporarily scrapped for first-home buyers purchasing newly-built properties worth up to $800,000.
Stamp duty will also be heavily discounted for homes priced up to $1 million in a year-long initiative to provide a much-needed boost to the construction sector and inject confidence into the struggling property market amid the coronavirus recession.
Premier Gladys Berejiklian said thousands of buyers and builders would benefit from the stamp duty changes, which "will help get more keys into more front doors of more new homes".
"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," Ms Berejiklian said.
From August 1, stamp duty will be temporarily eliminated on all new builds priced below $800,000, with tapered tax discounts for properties worth up to $1 million.
First-home buyers currently do not pay any stamp duty on homes costing less than $650,000, with concessions phasing out at $800,000.
First homebuyers will save $31,335 on a new home that costs $800,000. They will save $15,668 on a new $900,000 property.
Tax breaks on existing homes - including the $650,000 stamp duty exemption - will remain.
Stamp duty exemptions on vacant land will also be increased, with the threshold rising to $400,000.
That means buyers of a vacant block of land could save almost $8000.
The government hopes easing the burden of buying a newly built property will stimulate the construction sector, which employs around 376,000 workers in NSW.
Residential and commercial construction contributed $48 billion to the state's economy in 2018-19.
The unemployment rate in the state is currently at 6.9 per cent, up from 4.5 per cent in January, with around 200,000 in NSW becoming unemployed due to COVID-19.
Treasurer Dominic Perrottet said: "At a time when keeping and creating jobs is vitally important, this will give the construction industry extra support by making it more affordable for first-home buyers to purchase new homes."
"We need to ensure our building sites keep ringing with hammers and saws as that means more people working, and first homeowners will save money in the process.
"This is a win for first home buyers who will save big on a newly built home, a win for the construction industry which employs tens of thousands of people, and a win for the property sector facing the challenges of COVID-19."
More than 54,226 construction businesses in NSW had applications for JobKeeper payments processed as of last week.
Increasing the stamp duty exemption threshold is expected to cost the government at least $70 million in lost revenue.
Wisdom Homes Managing Director Domenic Vitalone said increasing the stamp duty exemption threshold to $800,000 would "capture a lot more opportunity" to help people get a foot on the ladder in more areas across Sydney.
"They're trying to stimulate the economy so targeting new builds is the best way to do that and it will make a difference," Mr Vitalone said.
He said increasing stamp duty exemptions could encourage developers to proactively build new homes.
"For some larger developers, we might be enticed to actually build projects and sell them as completed, rather than wait for a mum and dad to buy a block of land and build a home (later)," he said.
Hopeful househunter Lorin Sahin, from Glenwood, said increasing the value of homes eligible for stamp duty exemptions would help her get a foot in the door.
The 27-year-old, who works for a coffee roasting company, said the change would hopefully help her buy a newly built home in Sydney's north west in the next year.
"There's so many people out there that would benefit," she said.
Ms Sahin has been trying to get on to the property ladder for some time.
She said giving more people access to stamp duty exemptions would be a deciding factor in new buyers entering the market.
Teachers Ben and Sharlene Fracarossi recently purchased a new townhouse in Oran Park. Its sale price of $660,000 means they will only pay stamp duty on the $10,000 above the current exemption threshold.
The couple said they were lucky to find their home but would have found it difficult to find a freestanding house for $650,000.
"The way house pricing is, it's difficult to take advantage of the (current) exemptions," Mr Fracarossi said.
Originally published as Stamp duty suspended for some new home buyers