How first-home buyers can save $31k
First-home buyers in NSW could get a big leg up from the state government, with a proposal to lift the stamp duty exemption cap from $650,000 to $800,000.
One of Labor’s signature election promises, the government will introduce the legislation once parliament resumes this week. It will also cancel the Coalition’s First Home Buyer Choice (FHBC) scheme from July 1 despite protest from the opposition.
Under the new policy, first-home buyers will not have to pay stamp duty on homes under $800,000, which could save them up to $31,090. They will also access significant concessions for homes up to $1m; however, the benefits will be costed on a sliding scale depending on the cost of the home.
For example, a first-home buyer will have to pay a stamp duty of $10,023 (saving $23,318 on existing rates) on a property worth $850,000. However, a home worth $990,000 will incur $38,086 in stamp duty fees, with the savings significantly reduced to $1555.
Buyers will also be required to live at their chosen property for 12 months, instead of six, in a move the government hopes will improve the integrity of the benefits.
NSW Premier Chris Minns said the policy would help more first-home buyers get on the property ladder.
“I understand the stress of trying to purchase your first home. I want more singles, couples and families realising this dream,” he said.
“Under Labor, any property purchased under $800,000 will have absolutely no stamp duty, and any property purchased up to $1m will have a reduced rate.
“This is a fairer and simpler system to ensure more first home buyers have a chance of owning their first property.”
Treasurer Daniel Mookhey said five out of six first-home buyers would be able to access some form of benefit under the new scheme.
“This policy will deliver the most help to the first-home buyers most at risk of leaving the housing market all together as interest rates go up,” he said.
“The new thresholds for stamp duty exemptions and concessions are a simpler and fairer way to help more first-home buyers than the property tax, which helped a smaller cohort of first-home buyers.”
First Home Buyer Choice scheme abolished
Despite calls from Opposition Leader Mark Speakman, Labor’s scheme will cut the existing FHBC scheme introduced by former premier Dominic Perrottet.
Having been in operation since January, the policy allows first-home buyers to choose between paying stamp duty or an annual property tax on properties up to $1.5m.
For example, while the stamp duty on a $1.5m inner-city apartment would be around $66,700, the annual land tax would be $1445.
According to the opposition, the take-up of the scheme has exceeded expectations, with
Mr Speakman also pledging to seek support from crossbenchers to extend it.
Opposition housing spokesman Scott Farlow said aspiring homeowners would take about an extra two years to factor in stamp duty when saving for a home.
“Rather than axing First Home Buyer Choice the Minns government should team up with
the Andrews Labor government in Victoria to advance a national scheme that progressively
replaces transfer duty with a fairer system,” he said.
“This would be a real step towards solving the national housing affordability challenge.”