NSW Premier Gladys Berejiklian announced a raft of measures yesterday to tackle housing affordability for first home-buyers in NSW.
These measures include:
- Abolishing stamp duty for first home buyers for homes up to $650,000 from July 1. (This lifts the value of eligible properties from the existing $550,000 and reintroduces existing homes to the scheme.)
- Providing a discount on stamp duty for first home buyers for homes up to $800,000
- Stamp duty charges that banks require from first home buyers for lenders’ mortgage insurance will be axed
- $3 Billion spending allocated to improve housing infrastructure
- Doubling the Foreign Investor Stamp Duty Surcharge from 4 per cent to 8 per cent, and increasing the land tax surcharge will increase from and 0.75 per cent to 2 per cent
- ‘Off the plan’ properties will also attract stamp duty concessions in order to help first home buyers compete with foreign investors.
Ms Berejiklian said that the tax reform package is expected to cost about $1.2b but bring “thousands more” new first home buyers into the market over the next four years. She also acknowledged that the problem of affordability is a complex challenge without a single solution.
What the Property Council Say:
The Property Council welcomed this news as a strong step in the right direction to solving the housing affordability problem in NSW. “Overall this is a good plan – it balances supply and demand initiatives and shows the Government has listened to the industry and the people of NSW. The crucial aspect that will define its success will be increasing housing supply. Initiatives that increase demand, such as grants and tax incentives, must be matched by initiatives that boost supply and it appears the Government has heeded this advice,” Property Council NSW Deputy Executive Director Cheryl Thomas said today.
“The doubling of the stamp duty surcharge on foreign investment to 8 per cent and upping land tax on foreign buyers to 2 per cent is an approach that must be closely monitored – like any market, if you tighten the screws too tightly, you may inhibit growth” Ms Thomas said.
“We must be careful that foreign investment does not become the boogie man in our housing policy approaches; let’s not jump at shadows; foreign investment promotes growth, jobs and contributes to this state’s income.
“We welcome the government exempting foreign developers that provide housing supply from the surcharge and land tax increases; their original inclusion in the initiative was an unintended consequence that has now been put right.
“The expansion of State Infrastructure Contributions and changes to developer contributions under the Local Infrastructure Growth Scheme must take into account the myriad of other taxes and levies placed on the property industry, otherwise costs will rise and this will be seen in the prices paid for homes.
“The full exemption from stamp duty for first home buyers on new and existing houses up to $650,000 is to be welcomed, but the full exemption threshold could be increased. It should reflect the median house price in most Sydney suburbs and indeed in cities like Wollongong and Newcastle that sit at around $800,000.
“The Property Council looks forward to working with the NSW Government further on this important issue and build on these initiatives.”