Important stamp duty concessions announced by the NSW government will be a boost to 1st home owners. Licenced Conveyancer Rachel Godden discusses the changes.
In 2012 the NSW government changed their current First Home benefits scheme to the First Home – New Home scheme, which meant First Home buyers would only be exempt or available for concessions from paying stamp duty if they purchased a new home or vacant land to build a new home. This meant that not only did you have to save for a deposit you also had to save for stamp duty, placing a lot of first home buyers out of the market also with the increasing market prices.
This will change from 1 July 2017. First home buyers whether purchasing existing or new homes will see a stamp duty exemption on a purchase price of up to $650,000 (New homes are currently exempt up to $550,000) and will provide a discount for homes up to $800,000.
Unless you are borrowing less than 80% of the purchase price, you will more than likely be hit with mortgagees insurance. With mortgagee’s insurance comes insurance duty, another duty which most home buyers are unaware of. The removal of insurance duty will also come into effect on 1 July 2017 and could potentially save a home buyer $2,900 on a $800,000 property with a $50,000.00 deposit.
Stamp duty on a purchase of $650,000 is $24,740 with a possible saving of $26,857, taking into account the saving on insurance duty.
Only first home buyers purchasing new homes up to $600,000 or building a new home up to $750,000 are eligible for the grant of $10,000.00. However, it is hoped the measures will assist 1st home owners and go some way to ease their entry into the inflated property market. There are also the superannuation measures announced in the federal budget which may also assist home owners saving for a deposit.
Queensland stamp duty concessions remain unchanged. A property being purchased for $500,000 or less will not attract stamp duty and properties over $550,000 are not eligible for the first home concession. The Queensland government have extended the first home owners grant of $20,000 to the 31 December 2017 for first home owners building or purchasing a new home. The grant will revert back to $15,000 from 1 January 2018.
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