What Does The NSW Stamp Duty Exemption Mean For You?
A collective sigh of relief came from individuals across the state on Monday 27 July when the NSW Government announced that it would be introducing Stamp Duty exemptions for newly built homes purchased under $800,000. Today we’re taking a look at the details of the exemption, and what it means for you if you’re looking to buy a home.
In this article:
- What does the exemption actually mean?
- How can you benefit from it?
- How can you combine the exemption with other schemes?
So… What does the stamp duty exemption mean for me?
I’m glad you asked! For 12 months starting August 1, three new changes have been made to the stamp duty thresholds that were already in place:
- The original stamp duty exemption threshold of $650,000 for newly built houses will be increased to $800,000.
- The stamp duty concession threshold for newly built houses will be increased from its original $800,000 cap up to $1,000,000.
- The stamp duty exemption for vacant land will also be increased from $350,000 to $400,000, while concessions will be in place for land that costs up to $500,000.
For home-buyers, the main takeaway is this: you won’t need to pay stamp duty on a newly built house that costs $800,000 or less, and that you’ll pay less stamp duty on a newly built house that costs $1 million or less.
How the exemption benefits first home buyers
We’ve run the numbers for you. If you buy a newly built house for $700,000, you now won’t pay any stamp duty, saving you $10,445. For a house costing $800,000, this saving jumps up to $31,335. With less upfront costs and quicker market entry, this means that the money you might have already saved to cover stamp duty can now go towards your home loan deposit. This should lower your repayments and cut down on lenders mortgage insurance (LMI).
Can you use the exemption with other government schemes?
Yes, absolutely! If you’re buying a new property valued under $600,000, or building a new home worth $750,000, you can get all the stamp duty exemption benefits along with the $10,000 First Home Owner Grant (FHOG). Strategically planning your purchase also means benefits like the $25,000 Home Builder Grant or the First Home Loan Deposit Scheme. This could save you tens of thousands of dollars.
Following the statFollowing the state’s COVID-19 lockdown earlier this year, the reported sales of newly built homes dwindled. The NSW Government is hoping that by introducing these exemptions it will benefit 6,000 first home buyers, boost new property sales, and keep the construction industry and workers afloat.
With historically low-interest rates, incWith historically low interest rates, increased threshold exemptions and various schemes in place, income permitting, now might be one of the best times to purchase, or at the very least a great time to start thinking about doing so.
Disclaimer: The information provided is general and does not constitute financial advice. Please speak to us for recommendations on personal circumstance and requirements.