NSW Budget 2017-18: Disincentive announced for investors buying off-the-plan apartments

The State Government has announced in the 2017-18 NSW Budget that investors will now be required to pay stamp duty up front when buying apartments off-the-plan.

The move is designed to give first-home buyers an edge against investors who typically have higher purchasing power in the market.

Under current rules, any off-the-plan property buyer is allowed to delay the payment of duty by up to 12 months. This can be particularly attractive for those still saving up the rest of their deposit and costs, or those who have the money held up in other investments.

But the new rules will only allow this ability to defer for homebuyers, including first-home buyers.

“First-home buyers often face strong competition for off-the-plan properties from investors,” the Budget Statement says.

It said this measure was to help “counter” this competition from investors and to “assist families” buying off-the-plan.

All off-the-plan buyers who are not eligible for further assistance, such as a concession or exemption, would still be required to pay the stamp duty.

First-home buyers were given additional assistance to buy new and established properties.

This included retaining pre-existing grants, such as the $10,000 on offer for first-time buyers spending up to $600,000 on a new home.

A $10,000 First Home Builder Grant is also on offer for those building on vacant land where the total house and land cost does not exceed $750,000.

The NSW Government also confirmed the pre-budget announcement to abolish stamp duty for first-home buyers on new and existing homes up to $650,000 and reductions for homes up to $800,000. And lenders mortgage insurance duty has been abolished.

The cost of first-home buyer concessions and exemptions was anticipated to be $94 million in 2015/16, $90 million in 2016/17 and $276 million in 2017/18. The significant increase is expected due to the new stamp duty exemptions.

NSW Treasurer Dominic Perrottet said the “biggest expense many families face – especially in Sydney – is saving a deposit for their first home”.

“This comprehensive strategy boosts supply, accelerates infrastructure and reduces upfront costs,” he said.

“Our cuts to transfer duty on property and insurance mean families can pick up the keys to their first home quicker than before.”

Part of the affordability strategy is also a supply boost – with an extra 30,000 homes to be delivered by expanding Priority Precincts and Priority Growth Areas.

Minister for Planning and Housing Anthony Roberts said the “number one” priority was to build more houses and help make new homes more affordable.

“We are working on many fronts to make owning a home a reality for more people, by streamlining and simplifying the planning system so housing approvals can be fast-tracked and are continuing to release and rezone more land,” Mr Roberts said.

In the projections, $117.8 million will be spent on infrastructure, housing, employment initiatives, reviewing land use and infrastructure priorities for priority growth areas in the next four years.

Planning legislation is likely to be updated and a framework developed to apply statutory strategic planning to non-metropolitan areas.

SMH /Jun 20, 2017

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