NSW Freeze On Stamp Duty - Big Boost For First Home Buyers
The Berejiklian Government will temporarily change the stamp duty thresholds in a bid to help first home buyers enter the market and support the construction industry during the COVID-19 pandemic.
“Thousands of people will see their bank balances benefit from this change - it will help get more keys into more front doors of more new homes,” Ms Berejiklian said.
Commencing on 1 August 2020 and running for 12 months, the threshold for stamp duty being charged on new homes for first home buyers will increase from the current $650,000 to $800,000 with the concession reducing on higher values before phasing out at $1 million. The stamp duty threshold on vacant land will also rise from $350,000 to $400,000 and will phase out at $500,000.
The changes to the threshold will only apply to newly built homes (houses and apartments) and vacant land, not to existing homes.
According the NSW Treasurer, Dominic Perrottet, the government “expects 6000 first homebuyers will benefit from these changes” and will “save first home buyers up to $31,335 on a new $800,000 home.”
This initiative will also boost housing construction across NSW and support jobs in the industry at a time when we really need it. For more information on the changes to stamp duty in NSW click here.
In addition to these savings, first home buyers have access to a number of other state and federal government incentives:
1. First home buyer grants
The NSW government will continue to offer a $10,000 first homeowner grant, which is available to people buying a new first home worth no more than $600,000 or buying land and building a new first home worth no more than $750,000 in total.
This means the maximum benefit a homeowner could be entitled to is $32,335 if purchasing a new home and accessing the grant.
For more information on the NSW first home owner grants click here.
2. Government stimulus
In June 2020, the Federal Government announced a new HomeBuilder scheme which can help add even more money to first home buyer budgets. This initiative is designed to boost the construction sector, but has the added benefit of supporting first home buyers who are looking to build a new home.
Historically, the first home buyer grants have proven to be a successful driver of demand and now with the ability to combine it with the HomeBuilder scheme, we anticipate first home buyers, who have stable employment, will continue to drive demand between now and the end of the year.
For more information on the HomeBuilder program click here.
3. First Home Loan Deposit Scheme second intake
This is an Australian government funded initiative which partially guarantees some low deposit loans by helping eligible first home buyers avoid paying lenders mortgage insurance.
If a first-time buyer has less than 20% deposit, they will normally be required to pay lenders mortgage insurance which can be quite hefty. However, under this scheme, eligible first home buyers can purchase a modest home, with a deposit as little as 5% (lenders criteria applies) and the Commonwealth Government will guarantee the difference between what the first home buyer has saved and the 20% deposit threshold lenders usually require before they’ll provide a loan without lenders mortgage insurance. The government says this could save first home buyers as much as $10,000.
The property price threshold varies depending on where you are buying. To find out the property price threshold for the area you wish to buy in click here.
10,000 guaranteed loans were offered from 1 January 2020 and these were snapped up quickly. As of 1 July 2020, another 10,000 eligible first home buyers will be able to benefit from this. To find out more about applying for the first home loan deposit scheme click here.
A final word
These NSW and Federal Government incentives will undoubtedly help a number of first-time buyers fast track their purchasing plans and enable them to widen their search. Combine this with the lowest home loan interest rates since the 1950s, it makes 2020 an incredible time to buy your first home.
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