The topic of housing affordability has attracted significant attention in recent times, with varying views on the underlying cause and the best ways to solve the problem. While the topic is likely to continue to cause much debate well into the future, in this article we focus on the changes that have been implemented by the NSW Government to assist first home buyers in making their entrance into the market.

The following changes take effect from 1 July 2017:

Stamp duty

• Stamp duty abolished on both new and existing homes valued up to $650,000, and vacant land up to $350,000 for first home buyers;
• Stamp duty reduced on both new and existing homes valued between $650,000 and $800,000, and vacant land between $350,000 and $450,000 for first home buyers;
• 9% stamp duty on lenders mortgage insurance (LMI) abolished.

First Home Owners Grant

• A $10,000 First Home Owners Grant will be available:
  • For first home buyers purchasing new properties worth up to $600,000;
  • For first home buyers where you enter into a comprehensive building contract, or are an owner builder, and the total value does not exceed $750,000.

Other

• The 12 month off-the-plan transfer duty concession for residential purchases will be limited to owner-occupiers (previously also available to investors).
• The foreign investor surcharge on stamp duty will increase from 4% to 8%;
• The foreign investor surcharge on land tax will increase from 0.75% to 2%.