Stamp duty is being abolished for off plan real estate worth up to $600,000 and for some buyers of newly constructed properties in New South Wales, Australia.
The surprise tax cuts for property buyers are worth $140 million and will be available for two years from the beginning of next month.
So-called empty nesters, those aged over 65 will not pay stamp duty on newly built properties and other buyers of newly constructed homes will receive a 25% stamp duty discount.
The stamp duty relief for buyers of new houses and off plan apartments mirrors an initiative by the Victorian Labour Government that has boosted the property sector in Melbourne.
It means that NSW has Australia’s first zero per cent stamp duty after the state’s government’s latest budget showing the state back in the black two years earlier than expected.
Under the two year plan, beginning on July 1 this year, those purchasing properties off plan will pay no stamp duty, a saving worth up to $22,490 each, Treasurer Eric Roozendaal said. The over 65s will also get a stamp duty exemption for the same period, to help them downsize to a new home.
‘This will apply to people over 65 who sell their primary place of residence and move to a newly constructed home, whether it is house or an apartment,’ Roozendaal said.
The 25% stamp duty cut will also apply to those buying a home worth up to $600,000 which is under construction or just completed, he confirmed.
Roozendaal said the measures were aimed at boosting housing supply and housing construction rates across the state. The industry is regarded as a key driver of economic growth.
The Property Council of Australia welcomed the stamp duty cuts, saying its own research shows it should help increase housing supply by thousands and help developers to attract more off plan buyers. ‘If we get an additional 4,000 homes in New South Wales a year, we’re doing a lot to close the supply gap and a lot to improve affordability,’ said spokesman Glenn Byres.
The Australian Industry Group said that the stamp duty exemption for over 65s will not only boost development, but also free up existing homes that are too big for their current owners. ‘We welcome initiatives aimed at freeing up existing under utilised housing and stimulating new housing development,’ said Mark Goodsell, the Australian Industry Group’s New South Wales director.
The Construction, Forestry, Mining and Energy Union state secretary Andrew Ferguson says the stamp duty cuts should help boost employment in the building sector, particularly in regional areas where more houses fall under the $600,000 cut-off.