First time home buyers in NSW will soon feel the pinch of tighter stamp duty concessions, with the introduction of new measures by the State Treasury in the 2011-2012 Budget.
Change in a Decade
Stamp duty exemptions were first introduced in NSW by Bob Carr’s Labor Government in 2000 under the "First Home Plus Scheme".
Just over a decade later, Treasurer Mike Baird has scrapped the exemptions for first time home buyers who wish to purchase existing properties with the introduction of the Duties Amendment (First Home - New Home) Bill 2011 (NSW). The newly assented Bill amends the Duties Act 1997 (NSW) in relation to the duty exemptions, and concessions available to first time home buyers.
First time home buyers currently pay no stamp duty on all properties under $500,000, and receive a discount for properties valued up to $600,000. First home benefits of up to $24,990 have been available, including the $7,000 First Home Owner Grant and a duty exemption of up to $17,990 under the First Home Plus Scheme.
However, the new scheme means that from 1 January 2012, the stamp duty concessions will apply only to newly constructed homes - including those built off the plan.
The new scheme will provide full transfer duty exemptions for eligible first home buyers purchasing a newly built home that costs up to $500,000 and partial transfer duty exemptions for homes that cost between $500,000 and $600,000.
The $7,000 first home buyer grant will continue to be available to all eligible first time home buyers.
The new scheme only applies to "eligible" agreements for sale or transfers (where there is no agreement) entered into on or after 1 January 2012.
An 'eligible purchaser' is a natural person (i.e. not a company or trust) at least 18 years of age who has not, and whose spouse/de facto has not:
- at any time owned (either solely or with someone else) residential property in Australia other than property owned as trustee or executor
- at any time been the holder (either solely or with another person) of a leasehold interest granted by the Commonwealth in residential property in the Australian Capital Territory
- previously received an exemption or concession under First Home Plus.
The agreement or transfer must be for the acquisition of a first home, which is a new home or a vacant block of residential land intended to be the site of a first home. This includes the acquisition of:
- (a) a new home (that is a home that has not been previously occupied or sold as a place of residence)
- (b) a substantially renovated home
- (c) a vacant block of residential land (that is an agreement for the sale or transfer of vacant land that is intended to be used as the site of a first home).
Impact on Purchasers
Purchasers need to be aware, that between now and January 2012, there is potential for increased conveyancing matters in NSW, as first time home buyers take swift action to make the most of existing benefits before they are scrapped. If you are a first time home buyer and need a property settled in a timely manner, ensure you speak to a solicitor to avoid disappointment.