NSW stamp duty: How much you save and where to buy
First home buyers across more areas of Sydney will be able to save thousands on new properties after the state government increased the threshold for stamp duty exemptions. Here are the suburbs with the best opportunities.
NSW
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More than 6,000 first home buyers are expected to benefit from cuts to stamp duty on new properties, with industry groups declaring suburbs in Sydney’s northwest and southwest present the best opportunities for buyers looking to take advantage.
The government expects the biggest winners will be around 3,700 first home buyers purchasing homes between $650,000 and $800,000, or vacant land between $350,000 and $400,000.
Industry groups welcomed the government temporarily scrapping stamp duty for first home buyers purchasing a new home up to $800,000, first revealed by The Daily Telegraph on Monday.
Housing Industry Association NSW Executive Director David Bare said with the benefit of up to $31,000 in savings, it’s a “great time” for first home buyers to get into the market.
“This is going to open up a significant amount of the Sydney market to first home buyers,” Mr Bare said.
The NSW HIA director said the increase to the stamp duty exemption threshold would drive new building activity in “the greenfield areas in the southwest and the northwest”.
Mr Bare said previous caps for stamp duty exemptions were “just too restrictive” in Sydney.
“This is going to open up a significant amount of the Sydney market to first home buyers,” he said of Monday’s announcement.
During the year-long initiative to cut stamp duty and drive construction, first home buyers will be able to access a maximum benefit of $32,335 if buying a new home and accessing the First Home Owner grant.
That $10,000 grant is available to people buying a new first home worth no more than $600,000, or buying land and building a new first home worth no more than $750,000 in total.
Mortgage brokers Aussie said it had received an influx of first home buyers seeking to take advantage of new stamp duty concessions and other grants.
“Important initiatives like this will have positive outcomes for so many hopeful first home buyers, the housing and construction industry, and the entire NSW economy,” Aussie CEO James Symond said.
“While the stamp duty relief is temporary and only available for the next 12 months, it’s important for first home buyers considering purchasing a new home to understand their financing options and the range of conditions that apply.”
Urban Taskforce Chief Executive Tom Forrest welcomed the stamp duty relief as a “win-win” for buyers and builders.
He said increasing the stamp duty exemption threshold to $800,000 would see would-be buyers able to save on unit developments in areas like Parramatta and Rockdale.
The concessions on new homes up to a million would also see savings for areas in the northwest, including smaller blocks in Castle Hill to Rouse Hill, or Marsden Park, Mr Forrest said.
Mr Forrest also called on the federal government to increase the threshold for its $25,000 HomeBuilder grant to $800,000 to “make it relevant to the biggest market in the nation – that of Greater Sydney”.
Mr Bare said the NSW stamp duty decision would “complement” the HomeBuilder package and help drive construction jobs towards the end of this year.
Treasurer Dominic Perrottet said “close to 100,000 first home buyers take advantage” of cuts to stamp duty.
“We have forgone around half a billion dollars in stamp duty as a result of our changes which we brought in back in 2017,” he said.
HOW IT WILL WORK
From August 1, stamp duty will be temporarily eliminated on all new builds priced below $800,000, with tapered tax discounts for properties worth up to $1 million.
First home buyers currently do not pay any stamp duty on homes costing less than $650,000, with concessions phasing out at $800,000.
First homebuyers will save $31,335 on a new home that costs $800,000. They will save $15,668 on a new $900,000 property.
Tax breaks on existing homes — including the $650,000 stamp duty exemption — will remain.
Stamp duty exemptions on vacant land will also be increased, with the threshold rising to $400,000.
That means buyers of a vacant block of land could save almost $8000.
The government hopes easing the burden of buying a newly built property will stimulate the construction sector, which employs around 376,000 workers in NSW.
Residential and commercial construction contributed $48 billion to the state’s economy in 2018-19.
The unemployment rate in the state is currently at 6.9 per cent, up from 4.5 per cent in January, with around 200,000 in NSW becoming unemployed due to COVID-19.
Originally published as NSW stamp duty: How much you save and where to buy
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