On July 1st of this year, the government of New South Wales (NSW) initiated a two-year plan that allows individuals who buy property off-the –plan before construction begins to avoid paying stamp duty and save as much as $22,490, and first-time home buyers are also entitled to additional benefits of up to $7,000, known as the NSW Home Buyer’s Bonus.
The benefit provided by the plan is applied in this way:
– In the pre-construction stage, stamp duty will be reduce to zero for purchases costing less than $600,000 of new apartments and house-and-land packages.
– Stamp duty will be reduced by 25% for those who buy a newly constructed home costing less than $600,000. This applies to homes bought at any time while they are being built.
How retirees can benefit from the plan
In addition, those over the age of 65 will receive a zero stamp-duty exemption when they move into a newly constructed home after selling their primary residence. This is being done to support down-sizing and to regenerate NSW’s housing stock as well.
Note that, similar to other government incentive for the benefit of the public, there is a wide range of requirements that must be met before home buyers can actually receive an exemption.
Why this is being done
Authorities feel that taking this step will increase the housing construction rates, housing stock and private real estate activity throughout NSW and support those who are looking for affordable mortgages in order to buy a home. They further explained that a $101 million surplus made taking such a step possible.
Developer financing is generally considered to be a major stumbling block in stimulating the rate of new-home construction in NSW, especially in regard to apartment complexes. By encouraging their customers buy their homes off-the-plan at an early stage, contractors are more likely to obtain financing from banks in the area, and other financial institutions as well.
Note that the state’s housing sector is valued at $17 billion annually, it makes up nearly 5% of NSW’s economy, and construction in the private housing sector here has increased by3.2% in recent months.