NSW will scrap stamp duty for first home buyers on existing homes up to $650,000 from July 1 and increase the threshold for new homes to the same level, despite a warning from former Reserve Bank governor Glenn Stevens.
Premier Gladys Berejiklian announced the long awaited housing affordability package which will scrap stamp duty on first home buyers on existing and new homes up to $650,000. There will also be stamp duty discounts for homes up to $800,000.
Currently, first home buyers are only exempt from stamp duty on new homes up to $550,000. They can also get a reduced rate stamp duty for new homes up to $650,000.
Stamp duty charged on lenders’ mortgage insurance will also be abolished under this package.
The government will double the stamp duty surcharge on foreign investors from 4 per cent to 8 per cent, and land tax from 0.75 per cent to 2 per cent. It will also remove stamp duty discounts for investors purchasing off the plan.
However, Mr Stevens in his report to Premier advised her against taxing foreign home buyers.
“One area for caution might be demand side measures like taxing foreigners; if foreign purchasers are slowing down anyway, we may not want to push them down further,” he said.
Source: The Australian Financial Review