First homebuyers are rushing on to the NSW market following stamp duty relief

There has been a massive surge in the take-up of stamp duty exemptions by first homebuyers looking to keep the great Australian dream alive.

First homebuyers have plunged in to the property market despite the pandemic with new Treasury figures showing an almost 30 per cent surge in take-up of stamp duty relief.

In a trend that shows the great Australian dream remains alive, more than 41,000 first homebuyers have taken advantage of $559.7 million worth of NSW government ­assistance. And there are already signs the figure will rise further in response to the more generous threshold changes.

The exclusive data comes as the state government continues to explore options to make it even easier to enter the market with a proposal buyers be given the choice of paying stamp duty or a new smaller annual property tax being discussed.

Under the First Home Buyer Assistance Scheme, people buying a new home valued at less than $800,000 can apply for a full exemption on stamp duty.

First homebuyers are snapping up properties across NSW.

For new homes valued ­between $800,000 and $1 million, buyers can apply for a concessional transfer duty rate with the amount based on the value of the property.

Buyers of land valued at less than $400,000 are also exempt while blocks worth between $400,000 and $500,000 att­ract a concessional rate.

The stamp duty concession thresholds, which are valid for homes purchased between August 1 last year and July this year, were temporarily revised last year to allow more buyers to access the concessions.

Treasury figures show there were 41,036 first home buyers who took advantage of stamp duty relief last year — up from 31,676 in the previous year.  

The data shows the threshold changes sped up take-up rates in the five months from August to December last year with 21,436 first homebuyers accessing concessions compared with 14,967 over the same period in 2019.

Lending to first home buyers for owner-occupier housing rose by more than 30 per cent from 2019 to 2020

Premier Gladys Berejiklian said the first homebuyer concessions had had the twin benefit of helping buyers enter the market while also boosting the economy.

“We all know how challenging 2020 was and our suite of COVID-19 support and stimulus measures — the largest of any state or territory — has helped cushion the worst economic impacts of the pandemic,” she said.

The take-up rate comes amid the average sales price growing from six times average annual earnings in 1990 to 9.5 times average annual earnings in 2020.

NSW Treasurer Dominic Perrottet said the rise in first-home buyers taking advantage of the concessions sent a clear message that if the financial barrier for people trying to enter the property market was lessened, the desire and ­demand for home ownership remained strong.

The stamp duty reform process under way acknowledged the impost it posed to first home buyers, who took 50 per cent longer to save for a deposit than in the 1990s, he said.

“Every society needs to work towards ensuring that our kids have better opportunities than we have,” he said.

Australian Bureau of Statistics data shows lending to first home buyers for owner-occupier housing rose by more than 30 per cent from 2019 to 2020.

Feedback on the plan closes March 15.