NSW government announces a comprehensive housing affordability package
Every NSW first home buyer knows how hard it is to save a deposit plus the stamp duty that goes along with the deposit (on a $500,000 established property this is approximately $18,000 alone!). The deposit hurdle is the hardest part of being a first home buyer. But after 2 years of lobbying efforts by First Home Buyers Australia, it is set to get easier for NSW first home buyers.
Today the NSW government has announced a comprehensive housing affordability package designed to help first home buyers across the state. The centre piece of this package is in the form of stamp duty relief for first home buyers of both new and established homes. Premier Gladys Berejkilan said “I want to ensure that owning a home is not out of reach for people in NSW”.
The measures announced the the government are scheduled to come into effect 1 July 2017 should they pass the Parliament.
In May FHBA’s Daniel Cohen [left] spoke to 7 news about the need for stamp duty relief for fhb’s. NSW Premier Gladys Berejkilan [right] is now delivering
Summary of proposed stamp duty relief for first home buyers
The government announced much needed stamp duty relief for NSW first home buyers today (to be brought into effect from 1 July 2017 if the policies become legislated). But are the thresholds high enough given Sydney’s soaring property prices?
- No stamp duty for eligible first home buyers who purchase a new or existing dwelling under $650,000
- Discounted stamp duty for eligible first home buyers who purchase a new or existing dwelling between the value of $650,000 and $800,000
- Stamp duty Lenders Mortgage Insurance (LMI) abolished
Local investors also hit from 1 July 2017
First home buyers who are looking to buy off-the-plan often face stiff competition for those properties from investors. To mitigate this, investors will no longer be able to defer the payment of stamp duty for 12 months (like they use to be able to do).
Buyers who are purchasing a home they plan to live in off-the-plan (regardless of whether they are first home buyers or not) will still be entitled to a 12-month delay in the payment of stamp duty.
Abolishing this concession for investors may force some off-the-plan investors to reconsider buying these type of properties.
Summary of affordable housing supply measures
Today’s announcement also focused on building more affordable housing supply across Sydney. The main points were:
- The government will commit $3 billion in infrastructure funding from government, councils and developers to accelerate the delivery of new housing
- The government will work to fast-track approvals for well-designed terraces, townhouses, manor homes and dual-occupancy by expanding complying development to include these dwelling types
- Greater use of independent panels for Councils of Sydney and in some regional areas to ensure development applications are done effectively and to ensure the integrity of the planning process
- Measures to maintain the local character of communities.
The map below show’s the focus areas for new housing supply across the Sydney metropolitan area:
Map of housing growth areas Source: NSW government
Summary of increased taxes on foreign investors
To further help first home buyers compete with cashed up foreign investors (& raise funds to cover the first home buyer stamp duty concessions outlined above), the government also announced increased taxes on foreign investors, including:
- Doubling the foreign investor surcharge from 4% to 8% on stamp duty; &
- Increasing the land tax surcharge on foreign investors from 0.75% to 2%
These changes are also subject to passing legislation.
Where can I learn more?
The government has created a webpage with further details on the housing affordability package – click here to see it
FHBA co-founder Daniel Cohen was on Ten News this evening also discussing the changes. You can watch it here:
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We will report the stamp duty changes in full on 1 July, including the full eligibility requirements.
First Home Buyers Australia