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In a bid to make buying a house in Sydney that little bit easier, the NSW government has announced that it will no longer charge stamp duty on homes that are "bought off the plan" for less than $600,000.
The change in state policy will cost the NSW government approximately $184 million in lost property taxes.
Stamp duty will be cut by 25 per cent on homes worth up to $600,000 that are bought during construction or at completion, translating into an average saving of $5,623.
The stamp duty changes are expected to be widely welcomed by NSW buyers, as 79.1 per cent of dwellings within the state are sold for under $600,000.
In addition, the government has also introduced other concessions on new home purchases and construction.
NSW Treasurer Eric Roozendaal said the $140 million property construction initiative will save NSW families and investors up $22,490, with first home buyers eligible to receive benefits of up to $29,490.
“This is an Australian-first, signalling the Keneally government’s commitment to boosting the state’s housing construction sector and building for the future of NSW,” Mr Roozendaal said.
But while the stamp duty concessions and other government initiatives may seem like an attempt to ease the ongoing imbalance between supply and demand, the reality is quite different.
Starr Partners chief executive officer John McCormack said the latest measures do very little to improve affordability or open up supply amongst homebuyers in Greater Western Sydney.
“The only way to achieve this is by generating more activity. Unfortunately there appears to be little respite for developers who will continue to be hit by infrastructure costs. Ultimately these costs will be passed on to the consumer, so the money buyers stand to save on stamp duty could be negated by the higher final purchase price of the home,” Mr McCormack said.
“Both the State and Federal governments need to give relief to developers in order to stimulate the Greater Western Sydney market, which is in danger of becoming more and more sterile as current planning and development fees add time and costs to the development process.”
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