The State Government has announced sweeping changes to stamp duty laws for first home buyers, overseas investors and off the plan purchasers. Said to provide a ‘fair go’ for first home buyers, there are 6 main changes coming into effect from 1 July 2017:
- First home owners will be exempt from stamp duty for new and existing properties up to $650,000 (currently only $550,000 on new homes only).
- Stamp duty will be discounted for first home buyers purchasing new and existing properties up to $800,000 (currently up to $650,000 on new homes only).
- Stamp Duty on lenders mortgage insurance to be abolished (currently incurs duty at 9%).
- The foreign investor stamp duty surcharge will increase (to 8%), as will the foreign investor surcharge on land tax (up by 0.75%). Land tax for foreigners will also apply to companies if there is a 20% or greater foreign ownership. Land tax for foreigners will apply in regard to the surcharge on their principal place of residence.
- Purchasers of new properties up to $600,000 will be eligible for a $10,000 First Home Owners Grant. If first home owners are building the new property, they will be entitled to a $10,000 grant on homes up to $750,000.
- Investors buying off the plan will no longer be able to defer paying stamp duty for off the plan purchases and stamp duty will be due 3 months after the exchange of contracts. Currently, they are entitled to defer payment up to 15 months after settlement. Owner/occupiers will still be entitled to defer the payment of stamp duty up to 15 months after settlement.
The stamp duty and land tax charges for foreigners apply from 21 June 2017.
The changes for first home buyers will only apply to contracts dated from 1 July 2017. Contracts entered into earlier will still be eligible for grants and concessions they would have been eligible for had these changes not come into effect.
The policy package for first home buyers includes additional measures to assist with housing supply and delivery of infrastructure. The full policy can be read here. The package is, according to the NSW Government, designed to make owning your first home easier.
But only time will tell.
If you are a first home owner, or if you are looking to provide financial assistance to a child or friend looking to buy their first home, please contact our Conveyancing Team at Watkins Tapsell. Our licensed conveyancers and accredited property law specialist look forward to assisting you.
Email firstname.lastname@example.org or call 02 9521 6000.