First home buyers face many hurdles when entering the housing market with affordability being the number one barrier. The state government has responded to the astronomical house prices, lack of supply, and heavy competition from foreign investors by developing policies that aim to alleviate some of the burdens for first home buyers. The new policies were recently announced by Premier Gladys Berejiklian and will take effect from 1 July 2017. The package of policies will include grants and concessions, increased investment into housing supply and acceleration of the delivery of infrastructure to support growing communities.
Below is a breakdown of the package and perks for first home buyers:
NSW will scrap stamp duty for first home buyers on new and existing homes up to $650,000 and a proportioned discount will be applied for homes up to $800,000. This could see first home buyers reap a five figure savings on stamp duty alone.
Those who choose to build a new property valued up to $750,000 along with anybody purchasing a new property worth up to $600,000 will be eligible for a $10,000 grant.
Insurance duty on lenders’ mortgage insurance (LMI) has been abolished. Typically, banks and financial institutions will require you to have a 20% deposit in order to borrow money to purchase your home; however, LMI is an alternative option where lenders may allow you to borrow the same amount with a smaller deposit than would otherwise be required. Luckily for first home buyers, the insurance duty attached to LMI has been waived.
To minimise competition from investors, the NSW government has doubled the stamp duty surcharge for off-shore investors from 2% to 4% and land tax has also increased from 0.75% to 2%. Furthermore, the concession to delay payment of stamp duty from 3 to 15 months after settlement on off-the-plan purchases is no longer available for investors, both domestic and international.
The NSW government also hopes to improve housing affordability by increasing housing supply, including the acceleration of rezoning and building infrastructure such as roads, schools and utilities that can facilitate development.
Increasing housing supply is only possible if there is adequate infrastructure to service new homes and support communities. The NSW Government will inject $3 billion into infrastructure funding to accelerate the delivery of housing, ensuring that works which support housing are prioritised and in locations in alignment with government planning and housing demand.
You think you qualify? but have a few more questions...
If you are considering buying or moving, or to simply find out if you are eligible for the first home buyers concessions and exemptions. Contact us for advice on how to get started or have your current situation reviewed, call us on 02 9328 0876.
General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.