First homebuyer grant doubled in Budget
BUYERS grant boosted from $7000 to $15,000 in NSW Budget - but there's a catch.
FIRST home buyers purchasing new homes will have their grants increased from $7000 to $15,000 for 15 months and then pushed down to $10,000, in the key giveaway of today's NSW Budget.
But there will be a catch - stamp duty concessions which had been given for properties worth up to $835,000 will now only be available at 100 per cent for properties worth up to $550,000.
From $550,000 to $650,000, the concession reduces 1 per cent for each $1000 spent, graduating down to zero.
And a stamp duty concession for off-the plan apartments and house and land packages will be scrapped in favour of a flat $5000 payment to anyone who buys a newly-constructed home.
As foreshadowed by The Daily Telegraph on Saturday, this will represent roughly a 25 per cent concession on stamp duty.
Because of the shifting around of money, all the stamp duty changes will be revenue neutral.
Treasurer Mike Baird said yesterday the Government made no apologies for shifting money around to increase the home owners’ grant for people spending less than $650,000 - the median Sydney house price - for a new home.
He said the Budget was about getting the property sector moving.
“By better targeting incentives, by funding infrastructure and by clearing roadblocks to development, we will stimulate the housing and construction sector which forms such a critical part of the state’s economy,” Mr Baird said.
The Government also announced today it would sell Port Kembla in addition to Port Botany as part of asset sales to fund infrastructure. The sale would yield $100 million for infrastructure in the Illawarra.
As expected The Treasurer said he would cut 10,000 jobs over four years - or the equivalent, depending on what Directors-General decided to cut, but there was little detail on what programs would be cut.
But the centrepiece of the Budget is “Building the State” - the name of the package which the Government has introduced for homebuyers and development.
Under the changes, from October 1, the First Home Owners Grant will go to $15,000 and then continue at $10,000 from January 1, 2014 for first time buyers of new properties.
From June 30, the “New Home Grant” of $5000 will be paid to anyone buying a newly constructed home worth less than $650,000.
Stamp duty on such a home is usually worth around $25,000.
For vacant land, stamp duty exemptions will be available for land valued at up to $350,000, with the concession decreasing to $450,000.
The Government also announced it would delay business tax cuts for a year - a change it said had been forced on it by tough economic times.
It had promised as part of an agreement with the federal government to abolish mortgage duty on business transactions and duty on transfers of non-land business assets from July 1, 2012. Those cuts will now be delayed until July 1, 2013.
“We must take our medicine today, if we’re going to be healthy tomorrow,” Mr Baird said in his budget speech.
The 10,000 job cuts is detailed in the budget papers as a “labour expense cap to deliver approximately $2.2 billion in savings over four years”.
Building the State will also allocate $561 million to boost housing supply including payment for new roads, power, water and sewerage connection for greenfields sites in NSW.
Thirty million dollars will be spent on planning money for a major new road with more than $2 billion to be set aside for the Restart NSW fund, probably for the M5 duplication, once the electricity generators are sold off.
The Budget includes a $337 million deficit for 2011-12, an $824 million deficit for 2012-13, a $289 million surplus for 2013-14, a $562 million surplus for 2014-15 and a $1.172 billion surplus for 2015-16.
As foreshadowed, speeding fines will be increased by 12.5 per cent to raise $180 million over four years.
The Government also expects coal royalties to increase from $235 million in 2012-13 to $550 million in 2015-16.
The Government raised coal royalties last year to offset the cost of carbon tax on the State Budget.
Mr Baird said some tough decisions had been required to offset a loss of GST revenue from the Federal Government of $5.4 billion over four years.