NSW Stamp Duty reforms
The State Government has announced that as from 1 July 2017 several new stamp duty reforms will be introduced in an endeavour to improve housing affordability and assist first home buyers in buying their first home.
These reforms include:
- First home owners in NSW will not be liable to pay stamp duty on both new and existing homes for property with a purchase price of up to $650,000.00.
- There will also be stamp duty relief introduced in respect to properties with a purchase price between $650,000 and $800,000.00.
- Stamp duty on lenders’ mortgage insurance will be abolished.
- The stamp duty surcharge for foreign investors will double from 4% to 8% and the land tax surcharge from 0.75% to 2%, in an effort to reduce competition and lower prices for local purchasers.
- The state government has also decreased the foreign resident capital gains withholding tax threshold (FRCGWT), which previously applied for any property over $2M at a rate of 10%. Under the new reforms any property over $750,000.00 will now incur FRCGWT of 12.5%.
- The $5,000.00 New Home Grant Scheme has now been abolished.
Sydney prices being what they are, whilst these reforms will assist first home buyers who are happy to purchase in the outer suburbs of Sydney, it is going to be of little help to so many first home buyers who are wanting to live closer to the CBD and their place of employ.
Time will also tell whether an influx of first home buyers in the market will cause already too high prices to rise even higher.