New South Wales, in releasing a package of measures aimed at improving home affordability, has given first homebuyers a big hand in getting a start in property ownership.
Stamp duty concessions now apply for those buying either a new and or existing home.
All stamp duty for first homebuyers on new homes up to $650,000 has been abolished, a significant saving on the total cost of purchase.
And stamp duty discounts apply after that, up to a limit of $800,000.
The savings are smaller for existing dwellings, but are still significant.
NSW also abolished stamp duty charged on lenders’ mortgage insurance, which is often required by banks to lend to first homebuyers with limited deposits. This would save about $2,900 on an $800,000 property.
The changes start on July 1.
Barton Deakin, a government relations consultancy aligned with the Liberal-National Coalition, produced this table showing the savings for both new and existing homes:
The total saving is actually greater than the current normal stamp duty, according to Barton Deakin, which did the calculation using the total stamp duty exemptions plus first home owners grant and then added the savings from lenders’ mortgage insurance duty abolition.
The sweet spot — the maximum saving — is for new homes costing $600,000, and for existing dwellings it’s $650,000, as this chart shows:
The stamp duty savings for a new home costing $600,000 is $34,361, compared to $24,361 for an existing dwelling.
A $650,000 existing dwelling saves $26,857 in stamp duty, the same amount as a new home.
And among the measures announced by the NSW government are increases in fees for foreign buyers, aimed at cutting demand for property.
The foreign investor stamp duty surcharge will be doubled to 8% from 4% and that for land tax increased to 2% from 0.75%.
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