NSW Premier Gladys Berejiklian will introduce new housing affordability measures from July 1 that will wallop foreign property investors with higher duties and taxes and give first home buyers a lift by expanding stamp duty concessions.
Ms Berejiklian announced the changes today [Thursday] to double the stamp duty paid by foreign investors from 4 per cent to 8 per cent and increase the annual land tax surcharge on foreign buyers from 0.75 to 2 per cent.
The forecast proceeds of $2 billion over the next four years are expected to be funnelled into more generous stamp duty concessions for first home buyers.
The government will exempt first-home buyers from paying stamp duty on existing properties costing up to $650,000, not just new properties, and offer stamp duty discounts up to $800,000.
It is good news for those saving for their first pad, with the government claiming this initiative alon could save first homebuyers up to $24,720.
It is a significant jump. Current stamp duty exemptions for first home buyers apply only to new homes up to $550,000 and vacant land valued up to $350,000.
At the moment, stamp duty concessions for first home buyers kick in for new properties valued between $550,000 and $650,000 and for vacant land valued between $350,000 and $450,000.
Other measures in the housing affordability package include:
- Removing stamp duty concessions for investors purchasing off the plan
- Infrastructure funding of $3 billion from the state government, councils and developers to accelerate new housing
- Abolishing the 9 per cent stamp duty charged on lenders’ mortgage insurance, which banks often demand when they lend to first homebuyers with smaller deposits
- Fast-tracking approvals for well-designed terraces, townhouses, manor homes and dual occupancy by including them under complying exempt development
- Greater use of independent panels for Sydney councils and in some regional areas to speed up development applications and ensure the integrity of the planning process
NSW Premier Gladys Berejiklian said that taken together, the changes could save first homebuyers up to $34,360.
“I want to ensure that owning a home is not out of reach for people in NSW,” Ms Berejiklian said.
“These measures focus on supporting first homebuyers with new and better targeted grants and concessions, turbocharging housing supply to put downward pressure on prices and delivering more infrastructure to support the faster construction of new homes.
“This is a complex challenge and there is no single or overnight solution. I am confident these measures will make a difference and allow us to meet the housing challenge for our growing state.”
NSW Treasurer Dominic Perrottet said the government would use its strong Budget position to ‘give a leg up’ to prospective first homebuyers while simultaneously targeting infrastructure investment to stimulate housing growth in Sydney and parts of regional NSW.
“As a government, we have always focused on supporting first homebuyers and this package takes it to the next level,” Mr Perrottet said.
“We know how challenging it can be to enter the property market and are pleased to be providing even more financial support for people wanting to make their first purchase.”
NSW Planning Minister Anthony Roberts said the government would simplify complying development rules for greenfield areas and establishing specialist teams to help speed up rezoning residential development, where appropriate.
“While we have done well to release an unprecedented amount of land over the last six years, we need to do better with our development application process to ensure we are keeping up with demand,” Mr Roberts said.