Last Thursday, NSW Premier Gladys Berejiklian announced new housing affordability reforms from July 1 that include more than $1 billion in expanded stamp duty concessions and measures for first time home buyers. “I want to ensure that owning a home is not out of reach for people in NSW,” Ms Berejiklian said.
The Government estimates these new measures could save first home buyers up to $34,000, with these saving being paid for in part by foreign investors. Under the plan, first home buyers will be exempt from paying stamp duty on existing properties up to $650,000, not just new properties and receive stamp duty discounts up to $800,000. The 9 per cent stamp duty charged on lenders’ mortgage insurance, for first homebuyers with smaller deposits will also be abolished.
What do these changes mean for investors?
Firstly, the Government has removed stamp duty concessions for local investors purchasing off the plan. This means investors who buy off the plan will need to pay stamp duty at the time of purchase.
Medium density housing applications and approvals are to be fast-tracked for well-designed terraces, town houses, manor homes and dual-occupancies by including them under complying exempt developments.
To speed up the development application processes and rezoning of residential developments across Sydney and in some regional areas, the Government will encourage greater use of specialist independent panels and teams.
At the same time, the Government announced $3 billion in infrastructure funding to help boost housing supply. Including $600 million of new money from the government’s infrastructure fund, Restart NSW. A reallocation of $1 billion from existing programs. And councils will be able to borrow more money, up to $500 million at reduced rates to accelerate rezoning around new developments.
“We know that supply is key, we do need more housing to put downward pressure on prices,” Ms Berejiklian said.
The Housing Affordability Package At A Glance:
- The stamp duty threshold for first home buyers increases to $650,000 and is discounted up to $800,000 and includes existing homes and new properties.
- First home buyers building a new property will be entitled to a $10,000 First Home Owners Grant on homes worth up to $750,000 and first home buyers purchasing a new property worth up to $600,000 will be entitled to a $10,000 grant.
- It removes stamp duty concessions for investors buying off-the-plan.
- A fast-tracking of approvals for well-designed terraces, townhouses, manor homes and dual occupancy by including them under complying exempt development.
- Greater use of independent panels for Sydney councils and in some regional areas to speed up development applications.
- Infrastructure funding of $3 billion.
- Abolishing the 9% stamp duty charged on lenders mortgage for first home buyers.
- The foreign investor surcharge increases from 4 to 8 per cent on stamp duty and land tax for foreign investors increases from 0.75 per cent to 2 per cent.