Taxes on Foreign buyers will help fund incentives for First Home Buyers into the property market.
The government are introducing new measures in a bid to tackle housing affordability. First Home Buyer tax breaks are high on the agenda of the NSW government. As such, they will be abolishing stamp duty on new and existing homes up to $650,000 and providing stamp duty relief for homes up to $800,000.
Insurance duty on LMI (Lenders Mortgage Insurance) will also be abolished, while the government will provide a $10,000 grant for builders of new homes up to $750,000 and purchases of new homes up to $600,000.
The surcharge on stamp duty for foreign buyers will double to 8 per cent and the surcharge on land tax will increase from 0.75 per cent to 2 per cent. However, foreign developers will be exempt from the increased surcharges.
The government has also announced measures to help first home buyers gain an advantage over Investors who currently account for around 48 per cent of buyers in the Sydney market. The NSW government are abolishing the 12-month deferral of duty for residential off-the-plan purchases for investors.
Buyers who are purchasing a home they plan to live in off-the-plan (regardless of whether they are first home buyers or not) will still be entitled to a 12-month delay in the payment of stamp duty, deferring payment from three to 15 months after settlement. But this concession will be closed to investors.”
The first home buyer tax breaks and incentives will take effect from 1 July 2017.
If you’d like to know how this will affect you either as a First Home Buyer or a Foreign Buyer, please get in touch with us here.
In addition, the NSW government has outlined plans to boost housing supply and infrastructure across the greater Sydney area.
“Overall this is a good plan – it balances supply and demand initiatives and shows the government has listened to the industry and the people of NSW,” Property Council NSW deputy executive director Cheryl Thomas said.
“The crucial aspect that will define its success will be increasing housing supply. Initiatives that increase demand, such as grants and tax incentives, must be matched by initiatives that boost supply, and it appears the government has heeded this advice,” she said.