Latest NewsProperty and 'the Budget'Sunday, 05 February 2017

The state government is planning to use its early return to surplus to boost the ailing home building market.

The headline announcement of the budget was stamp duty cuts totalling $140 million, including the country’s first zero per cent tax, for off-the-plan purchases worth up to $600,000.

Treasurer Eric Roozendaal says the budget measures are an Australian first and will help to get more homes built, and make them easier to buy.

‘‘The Keneally government is taking NSW forward into a new era of economic growth building a better future for the families and businesses of NSW,’’ he said in his budget speech to state parliament.

OVER 65's

NSW retirees are being coaxed into selling their oversized houses and downsizing to newly built residences, in a NSW budget plan aimed at boosting the new homes industry.

Homeowners aged over 65 are being offered stamp duty savings up to $22,490 to encourage them to move.

The discount applies to purchases of newly constructed houses and units, off-the-plan acquistions, and house and land packages.

The senior downsizers will pay zero stamp duty on property purchases costing up to $600,000 in what is billed as a policy first for the housing market.

About 70 per cent of NSW sales are under $600,000.

NSW houses have a $546,000 mean price, and units a mean of $457,000, according to the most recent Housing NSW data.

NSW Treasury expects between 1000 and 2000 seniors to take up the offer annually following its July 1 start date.

The government has budgeted for the seniors zero stamp duty initiative to cost $10 million in each of the next two years.

The seniors must sell their primary place of residence to move into the newly constructed house or unit.

"For people aged over 65, it won't matter at what stage of construction the home is - they will pay no stamp duty," NSW Treasurer Eric Roozendaal said.

The newly constructed homes for seniors must not have been previously occupied or previously sold.

For couples, at least one of the parties must be aged 65 or over to be eligible.

"The zero transfer duty for people aged over 65 will contribute both to the goal of helping older homeowners seeking to downsize their home, and the goal of encouraging new home construction," the budget papers said.

FIRST HOME BUYERS

The state government scheme extends stamp duty cuts from the traditional preserve of first homebuyers, who have preferred to buy established residences, as part of its concerted attempt to kick-start the ailing residential construction industry.

However first home-buyers will be encouraged into new homes with up to $29,490 in benefits if they buy off the plan in the pre-construction phase.

ALL BUYERS

The budget also offers zero stamp duty - and the potential saving of $22,490- to all home buyers and investors, albeit with a strict restriction.

The NSW Home Builder’s Bonus will only be available if buyers put a deposit down for an off-the-plan purchase or house and land packages costing less than $600,000.

There will also be a 25 per cent stamp duty cut for home buyers and investors - and a potential $5623 saving - if construction is already under way.

The stamp duty discounts will be available for the next two years.

5000 to 6000 investors and home buyers are expected to take up the wider off-the-plan offering, at an annual $60 million cost to revenues.

"The greater concession for purchasing off the plan will assist the financing of new developments." according to the budget papers.

SAVINGS

The opportunity for off-the-plan homes will be extended for two years, ending on June 30, 2012, and is estimated to save prospective home buyers up to $22,490.

As well, anyone who buys a recently constructed unit or house worth up to $600,000 will benefit from a 25 per cent cut to their imposed stamp duty.The government says the initiative will save those home buyers up to $5,623.

For two years from July 1, seniors who buy a newly constructed home worth up to $600,000 will also pay no stamp duty, saving a potential $22,490.

The budget initiatives represent $140 million in savings for prospective home buyers, Mr Roozendaal said.

BUILDING BOOST

The initiatives are designed to help lift the NSW housing construction out of the doldrums.

NSW housing construction has been trailing Victoria for the past five years and Queensland for the past four years.

Last June, NSW housing construction fell to record lows when just 422 units and townhouses were approved, compared with the previous 10-year June average of 1400 approvals.

In his budget speech, he highlighted the government’s return to a budget surplus, saying it would help energise the housing market.

‘‘Project financing can be a hurdle to new home construction, especially for apartments’’ he said. ‘‘So by helping people to buy off the plan and to buy early we are giving builders a better chance of securing project finance.’’

The construction industry will also get a direct boost, with the government capping local government infrastructure levels on housing developments.

Local councils will also receive $35 million in direct funding to help fast-track development and another $8.9 million to speed the government’s planning reforms.