Changes to stamp duty and a range of new grants available to home buyers were announced as part of the NSW State Budget handed down on 12 June 2012.
The focus of the new measures is to stimulate development in a weak New South Wales property market. The changes are good news for developers as demand for new homes is expected to increase and developers may use the measures as part of their marketing initiatives. It is also good news for first home buyers looking to benefit from stamp duty concessions and grants.
The measures include the replacement of the former New South Wales Home Builders Bonus Scheme and First Home Owner Grant Scheme. A summary of the new measures is set out below.
See Table 1 for a comparison between the various grants, exemptions and incentives prior to and post Budget 2012.
New Home Grant Scheme (from 1 July 2012)
The New Home Grant Scheme replaced the Home Builders Bonus scheme and targets home buyers, whether first time buyers or existing home owners. It is available to both owner occupiers and investors and there are no restrictions on how many times a purchaser can apply for the grant. The purchaser can be any entity including an individual, company or trustee.
The scheme provides a grant of $5,000 to buyers of new homes, whether off the plan or newly built, valued up to $650,000.
Purchasers of vacant land, that is intended to be the site of a new home, are also eligible for the grant for vacant land valued up to $450,000.
First Home Owner Grant (New Homes) Scheme
From 1 October 2012 the First Home Owner Grant (New Homes) Scheme comes into effect, replacing the First Home Owner Grant Scheme.
Under this new scheme, only first home buyers who purchase or build a new home valued at up to $650,000 will be eligible.
The grant will be $15,000 for contracts entered into between 1 October 2012 – 31 December 2013. The grant reduces to $10,000 for contracts entered into from 1 January 2014.
First Home – New Home
A further incentive available to first time buyers (individuals, not company or trust entities) comes in the form of increases in the transfer duty exemption caps, for new homes or vacant land transactions.
From 1 July, 2012:
- The cap on the value of new homes which are eligible for the stamp duty exemption will increase from $500,000 to $550,000. Partial exemptions will apply for new homes valued between $550,000 - $650,000.
- The cap on the value of vacant residential land which is eligible for the stamp duty exemption will increase from $300,000 to $350,000. Partial exemptions will apply to vacant land valued between $350,000 - $450,000.
See Table 2 for a quick reference guide to benefits available to a new home buyer under these new schemes.
All of these measures are aimed at supporting and invigorating the contribution of developers and home buyers to the State’s economy.
Deferred Abolition of Duties
The abolition of stamp duty on mortgages (other than for individuals which has already been abolished) has been deferred to 1 July 2013.