The New South Wales government has made temporary changes to stamp duty to help boost first home buyers and the construction industry.
The threshold above which stamp duty is charged on new homes for first home buyers will increase from $650,000 to $800,000, and from $350,000 to $400,000 for vacant land.
However, the changes will only apply to newly-built homes and vacant land, not existing homes, and will only last for 12 months starting on 1 August 2020.
The NSW government has forecasted more than 6,000 first home buyers will benefit from the changes.
Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.
Smart Booster Home Loan
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
Premier Gladys Berejiklian said the move would give much needed support to the group, as well as the construction industry.
“Thousands of people will see their bank balances benefit from this change – it will help get more keys into more front doors of more new homes,” Ms Berejiklian said.
“It will also boost housing construction across NSW and support jobs in the building industry at a time when we need them more than ever before.”
NSW Treasurer Dominic Perrottet said the changes would save first home buyers $31,335 in stamp duty on a new $800,000 home.
“The current scheme has already helped over 93,000 first home buyers since July 2017 and this will give the construction industry extra support as we face the challenges of COVID-19,” Mr Perrottet said.
“We need to ensure our building sites keep ringing with hammers and saws as that means more people working, and first home owners will save money in the process.”
First home buyers can also still access the $10,000 First Home Owner Grant, available to those buying a new home worth $600,000 or less, or buying land and building a new first home worth no more than $750,000.
David Bare, Housing Industry Australia (HIA) Executive Director NSW, said the changes to stamp duty, coupled with HomeBuilder, would give a much needed boost to first home buyers.
“Following the release of the NSW HomeBuilder details on Saturday, today’s announcement makes sense and will support many first home buyers get into the property market sooner," Mr Bare said.
“Combined with the existing $10,000 first home owners grant and the $25,000 HomeBuilder grant, first home buyers in NSW should be looking to a new home as a real option to take up home ownership."
Mr Bare added the changes would provide vital support to the construction industry which had seen many projects dry up in the wake of the pandemic.
“More importantly, this 12 month package will provide a much needed boost to an industry for which hundreds of thousands of people in NSW rely on for employment," he said.
“The home building industry will play a critical part of NSW’s economic recovery from COVID-19 related challenges and the NSW Government should be applauded for listening to our calls for greater support."
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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