Stamp duty abolished for first home buyers

Stamp duty abolished for first home buyers

Tumut PRDnationwide Director Lorraine Wysman

Tumut PRD Nationwide Director Lorraine Wysman is “over the moon” about changes aimed at easing the market for first home buyers, announced by Premier Gladys Berejiklian on Thursday.

“There was a great shout of excitement here which I think you’ll hear across NSW!” Ms Wysman said.

“It’s so important for people to get into the market, it’s a major step forward. They make that commitment and save for a deposit and then they’re off and running – a lot of the time home repayments are equal to rent, so they can put that money towards their home.”

The biggest part of the raft of announcements is that stamp duty, a tax due upfront when buyers pay their deposit, will be abolished for first home buyers purchasing new and existing homes up to $650,000.

Stamp duty on an existing property worth $300,000 for example, amounts to $9,262 – a sizeable amount on top of, say, a 20 per cent deposit of $60,000. This concession is only available to first home buyers, however, which the government hopes will reduce some of the advantage investors currently have over people who simply want to live in their own home.

Ms Wysman said it’s something those within the real estate industry have been pushing for a while.

“I will say congratulations to the Real Estate Institute; we are a member, and they have been lobbying long and hard for this to take place,” she said.

“People have not only had to save the deposit, they’ve had to find the stamp duty, and that’s an additional burden on first home buyers. So, I think this will be fantastic.

“It’s good that the NSW government has finally responded, and we are excited!”

Along with the stamp duty concession, Premier Berejiklian also announced a suite of other changes. There will be stamp duty concessions for first home buyers purchasing new and existing homes that cost in between $650,000 and $800,000, and the 9 per cent stamp duty charged on lenders’ mortgage insurance will be abolished.

Investors will no longer be able to defer paying their stamp duty for 12 months, the stamp duty surcharge for foreign investors will be doubled, and the land tax surcharge for foreign investors will be increased from 0.75 per cent to 2 per cent. The first home buyers grant for those buying a new home will now be eligible for homes up to $600,000 rather than $750,000, although it will not change for those building on vacant land.

There will also be changes to council processes, mainly in relation to metropolitan councils.

The changes are primarily aimed at helping first home buyers into the painfully expensive Sydney property market, where the median cost of an apartment is $700,000 and the median cost of a house is $1.15 million.

As Ms Wysman points out, that kind of money can get you the vast majority of properties in Tumut, meaning that the majority of first home buyers here will be assisted in purchasing their chosen property.

“The biggest benefit is for the metropolitan areas undoubtedly, but it’s going to benefit us as well,” she said.

“It starts from July 1 so we have a month to really encourage people to list their homes because it looks like the cap is $650,000 – that’s a big house for us in the country!

“We’re all very excited here in the office, it’s a very positive note that gives the new financial year a great boost.”