First home buyers of existing and new properties costing up to $650,000 will be exempt from paying stamp duty and will receive stamp duty discounts for properties worth up to $800,000, both from July 1, under reforms announced by Premier Gladys Berejiklian to improve housing affordability in NSW.
As well, the 9 per cent stamp duty charged on lenders’ mortgage insurance – often required by banks lending to first home buyers with limited deposits – will be abolished.
To help first home buyers compete with investors, the government will also remove stamp duty concessions for properties bought off the plan.
In other measures, the stamp duty surcharge for foreign investors will be doubled to 8 per cent and on land tax surcharge lifted from 0.75 per cent to 2 per cent.
Currently in NSW there is a stamp duty exemption for first home buyers of new homes valued up to $550,000 and vacant land valued up to $350,000.
There is also a stamp duty concession for first home buyers of new properties valued between $550,000 and $650,000, and for vacant land valued between $350,000 and $450,000.
Changes to stamp duty concessions – which reintroduce stamp duty relief for first home buyers of existing properties – are estimated to deliver savings of up to $24,740 for a first home buyer in NSW.
Ms Berejiklian said it was hoped the package, expected to cost about $1.2 billion, would bring “thousands more” new first home buyers into the market over the next four years.
“This means the NSW government not only has taken seriously the task of addressing housing affordability, but we’ve acted on it,” she said.
“We know there isn’t a single solution; we know this is a complex challenge. We know how hard it is to save up for your first home, especially in greater Sydney and some regional areas.”
The package is the government’s first response to the issue of housing affordability after Ms Berejiklian declared she would make it a priority upon becoming Premier in January.
To boost housing supply, the government says it will halve the cost of borrowing by local councils for eligible projects via interest rate subsidies.
Planning Minister Anthony Roberts said this was expected to “support” up to $500 million in additional borrowing.
The government would also promote the “greater use” of independent panels by councils to consider development applications.
This follows a proposal put to cabinet by Mr Roberts on Thursday that independent panels become mandatory for most councils across NSW.
Instead, Mr Roberts said the government would now consult with the community about how to promote their use.