From January 1, 2012, first homebuyers in NSW will have to fork out an extra $17,770 when buying a property valued under $500,000, thanks to the scrapping of the First Home Plus Scheme.
Under the scheme, first homebuyers were exempt from paying stamp duty on properties below $500,000 and received a discount for homes under $600,000. In the New Year, the First Home Plus Scheme will be replaced with the First Home – New Home Scheme, under which only newly built homes and vacant land for a first home below $500,000 will be stamp duty exempt or receive concessions.
Buyers of established homes – the majority of homes purchased in Australia – will no longer receive stamp duty exemption or concessions.
The state government’s reasoning is that applying the stamp duty exemption to new homes only will provide a boost to the struggling construction sector by making brand new homes more attractive to first homebuyers. These homes will be concentrated in areas where land is available.
As part of this policy, the state government will release 10,000 lots of vacant land over the next four years in the north west and south west of Sydney.
However, those first homebuyers looking to buy an established property in a suburb of their choice will have to find an extra $17,770 to cover the stamp duty for a $500,000 property. On a $600,000 property, the stamp duty will cost $22,490.
Luke McDonnell, a real estate agent with Richardson & Wrench Elizabeth Bay, said there has been a flurry of first homebuyers rushing to buy properties in Sydney’s eastern suburbs since the change was announced in September. “We had a one-bedroom apartment priced at $499,000 on the market for four months, and as soon as the announcement was made it sold within two weeks,” he said.
An ANZ spokesperson also said the bank has seen a moderate increase in applications by first homebuyers in NSW.
An agent with Ray White Glebe, Eileen Carroll, said it would be wise for first-home buyers to escalate their search and seal a deal on a new home before the year is out. “It’s a good idea to buy now. If you can save $17,000, that’s $17,000 in your pocket and not someone else’s pocket,” she said.