On the 1st of June 2017, the NSW first home buyers package was announced to the public. This is a package designed to improve housing affordability across the state by the state government for first home buyers, who often face stiff competition from investors.
It was stated that the policies take into account the difficulty that first home buyers (FHB) face in entering the market as well as the growing population and the need to ensure that development occurs close to essential infrastructures.
3 areas of support announced for NSW First home owners
- NSW First home owners grant - Increase in grants and concessions
- Housing supply - Increase supply but at reasonable prices
- Infrastructure - Deliver more infrastructure to support growth and demand
Summary of the overall NSW first home buyers package
- abolish stamp duty on all home up to $650,000
- provide stamp duty relief for homes up to $800,000
- builders to receive a $10,000 grant for builders of new homes up to $750,000 and purchasers of new homes up to $600,000
- abolish duty on lenders mortgage insurance or LMI
- foreign investors to pay higher duties and land taxes
- stop investors from foregoing stamp duty payments for off the plan purchases
Potential gains for first home buyers
- Savings of $24,740 on a $650,000 home due to reduced or abolished stamp duty
- $10,000 for buyers of new properties worth up to $600,000
- No more insurance duty on lenders mortgage insurance
- Foreign investors will pay double on Stamp duty 4% to 8%
- Foreign investors land tax will increase from 0.75% to 2%
- Regardless of the investor type no longer will they be able to delay for 12 months paying stamp duty on off-the-plan properties
How much could NSW first home buyers package save you?
Here is the best case scenario:
A buyer (who qualify for the NSW first home package) and if purchasing a newly built first home for $600,000 with a $50,000 deposit could end up saving a massive $34,361.
Stamp duty exemption (including LMI duty abolition) = $24,361
First home owners grant = $10,000
Total = $34,361
(see a more detailed version below)
Calculations below were based on a first home buyer with a 50K deposit.
Here is a direct link to the NSW government website where there is a small calculator to play with some of the numbers.
2017 is turning out to be a year where both federal and statement governments have started to address the much-needed housing affordability issues.
If you are saving for your first home also read about the proposed First Home Super Saver Scheme by the federal government.