Big change coming for first-home buyers

Massive changes are in store for first-home buyers in NSW from July 1, with the government announcing people can skip paying hefty stamp duty fees certain properties.

From Saturday, the reduced stamp duty rates on homes valued at $800,001 to $1m will operate on a sliding scale, with the benefits reducing the pricier a property is.

Under the new rates, an $850,000 property will incur a stamp duty tax of $10,023 instead of $33,340 – saving buyers $23,318.

Homeowners will save just $1555 under new concessions on a home purchased for $990,000, with stamp duty reduced from $39,640 to $38,086.

Currently stamp duty exemptions only apply to homes under $650,000.

The NSW Treasury expects about 8600 first-home buyers will qualify for a full exemption, with about 4400 people eligible for a partial exemption over the incoming financial year.

Labor have also flagged increasing the minimum time a first-home buyer needs to live at their property from six to 12 months in order to access assistance programs, in a move it says will increase the integrity of the measures.

According to new government figures, the $150,000 increase to stamp duty exemptions would open buyers to purchasing houses in suburbs like Cambridge Park, North St Marys, Richmond, and Werrington, where the median house price is between $650,000 and $800,000.

Buyers would also now have access to apartments in suburbs including Ashfield, Padstow, Arncliffe, Kogarah, Petersham, Epping and Sutherland.

NSW Treasurer Daniel Mookhey acknowledged stamp duty as a “considerable barrier” for those looking to get into the property and said the new changes will give first-time buyers a competitive edge in the market.

“July 1 will be a great day for thousands of extra first home buyers who will now pay zero stamp duty on their first home purchase,” he said.

“These changes will help five out of every six first home buyers pay no stamp duty, or a concessional rate, and delivers a key election commitment.

“The changes implemented ensure first homebuyer assistance in NSW is simpler and fairer, helping those who most need support.”

The new scheme coincides with the retirement of the First Home Buyers Choice, which allowed vendees to opt between paying stamp duty or an annual property tax on homes up ti $1.5m.

However grandfather clauses mean those who purchased under the scheme will continue with the arrangement until they sell their property.

Although the NSW opposition attempted to fight for both schemes to remain in place, the government said the cost burden was too great.

Labor also said analysis of the former Coalition’s plan revealed the biggest benefits went to buyers purchasing properties between the $1m to $1.5m range.