Stamp duty news: NSW abolishes stamp duty for first home buyers amidst COVID-19 pandemic
The New South Wales Government has just announced a $78 million relief measure that will see stamp duty abolished for all first home buyers purchasing new homes under $800,000. This temporary change will kick off from 1 August.
So what does this stamp duty news mean for first home buyers? We explore the new government scheme in more detail below.
We will continue to update this post as more information is released. Last update: 27 July 2020
What changes have been made to the First Home Buyer Assistance Scheme?
The changes to the First Home Buyer Assistance Scheme were first announced by the NSW government on 27 July 2020, as part of the Government’s COVID-19 Recovery Plan.
Under these changes:
- Stamp duty will be eliminated for first home buyers purchasing newly-built homes up to $800,000 — up from the previous threshold of $650,000.
- Stamp duty will be concessionally taxed for first home buyers purchasing newly-built homes up to $1 million. The amount of stamp duty that needs to be paid depends on the value of the home.
- Stamp duty will be eliminated for first home buyers purchasing vacant land up to $400,000 (up from $350,000).
- Stamp duty will be concessionally taxed for first home buyers purchasing vacant land up to $500,000. Like with first homes, the amount of stamp duty that needs to be paid depends on the value of the vacant land.
These changes will help first home buyers purchase a newly-built property, while also providing a much-needed boost for housing construction across the state and supporting building jobs within the industry. The changes only apply to newly-built homes and vacant land, not to existing properties. The stamp duty exemption threshold of $650,000 will remain the same for first home buyers who purchase an existing home.
In an official press release on the NSW Government website, Premier Gladys Berejiklian said:
“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. 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 Premier Gladys Berejiklian
Who is eligible for the stamp duty changes?
These new stamp duty changes apply only for first-home buyers purchasing newly-built homes and vacant land — not to existing homes. The NSW Government estimates that over 6,000 first home buyers will benefit from the changes.
To qualify, you need to:
- Be an individual over 18 years of age.
- Be an Australian permanent resident or citizen
- Have previously never owned or co-owned a residential property (this includes your spouse or partner).
- Have previously never received a first home owner grant or concession (this includes your spouse or partner).
Like before, once you have received the grant you must:
- move into your new home within 12 months after purchasing the property
- continuously live in your new property for at least 6 months
If you don’t meet these requirements, you will need to pay the correct amount of duty — and it could result in penalties or fines.
How much can I save with these new changes?
According to NSW Treasurer Dominic Perrottet, the changes could save a first home buyer up to $31,335 on a newly-built home worth $800,000. Under the previous scheme, first home buyers could only save a maximum of $24,877.80 on a home worth $650,000.
This table below outlines the indicative changes under the new stamp duty changes in NSW:
| Property type | Existing stamp duty amount for eligible first home buyers | New stamp duty amount for eligible first home buyers | Saving |
| Vacant Land ($350,000) | $0 | $0 | no change |
| Vacant Land ($400,000) | $7793 | $0 | $7793 |
| New home ($650,000) | $0 | $0 | no change |
| New home ($700,000) | $10,445 | $0 | $10,445 |
| New home ($800,000) | $31,335 | $0 | $31,335 |
| New home ($900,000) | $35,835 | $20,168 | $15,668 |
| Existing home ($650,000) | $0 | $0 | no change |
| Existing home ($800,000) | $31,335 | $31,335 | no change |
How long will the stamp duty relief run for?
The temporary measures will commence on 1 August 2020 and run for a total period of 12 months.
Is the First Home Owner Grant still available?
Yes. In addition to the First Home Buyer Assistance Scheme, the NSW Government will continue to offer the First Home Owner Grant for people buying a new first home. The upper threshold of the First Home Owner Grant remains at $600,000 for a new first home, and $750,000 for first home buyers purchasing land and building a new first home.
As per before, both the First Home Buyer Assistance Scheme and First Home Owner Grant are available for first home buyers in NSW.
Want to save more on your home loan?
These new measures are a welcome relief for first home buyers looking to purchase a new property. However, this scheme only forms a small part of the ongoing measures introduced by governments and lenders to support home buyers during this time.
We know that getting into the property market is challenging, particularly during the pandemic. That’s why our home loan experts are here to help. Get in touch with us today to see how we can help you secure a sharper home loan rate — and save thousands on your first home loan.
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