The housing and construction industry was the biggest beneficiary in the budget handed down by the NSW state government on the 8th June 2010.
In a move that copies a similar policy to Victoria, the NSW government will forgo approximately $184 million in property taxes to help developers partially finance their projects and hopefully kick start the NSW economy.
Under this initiative, to be known as the NSW Home Builders Bonus, from the 1st of July 2010 through to 30th June 2012, people who purchase a new home under $600,000 will be entitled to some sort of saving on their stamp duty.
This variation to stamp duty has been aimed squarely at encouraging people into the new property market. With the median house price in NSW sitting at $430,000 and the median unit price at $414,000 for the March quarter, the government expects this initiative to be very popular – and possibly an election winner?
Like any government initiative that benefits the public, there are a whole myriad of conditions to satisfy before the government actually grants you the exemption. Simply put, the government has basically segmented the definition of a new home into two categories:-
Homes at a pre-construction stage
Zero stamp duty will apply to off-the-plan purchases worth up to $600,000. This would only apply prior to any construction commencing on house and land packages or new apartments. This can potentially worth up to $22,490 in stamp duty saving.
First home buyers will also receive the state funded $7,000 First Home Owners Grant – receiving a potential benefit of up to $29,490.
Homes currently under construction
Stamp duty will be cut by 25% for people buying a newly constructed home worth up to $600,000. This stamp duty cut applies to home purchases made at any time during the construction period, or at completion. There is a potential stamp duty saving of up to $5,623.
Further, to potentially encourage empty nesters into the market and perhaps downsize, the government has extended the 0% stamp duty for those above the age of 65 who purchases a newly constructed home worth up to $600,000.
However, this will only apply to those who are also selling their primary place of residence and moving to a newly-constructed home.
As mentioned earlier conditions do apply to this benefit. At the time of writing, I note that there is a long list of eligibility requirements to meet before the exemption is granted. There is also a list of ineligible transactions as well.
Should you wish to explore the potential stamp duty savings available or have any specific lending enquiry, please do not hesitate to contact one of our advisers.
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