As discussed in our article last week, the State Government has announced that the First Home Owner's stamp duty exemption for existing dwellings will be returning for Contracts that are exchanged from 1 July 2017. The exemption already existing for new homes, though of course new homes tend to be more expensive than existing dwellings, so this is welcome news for first home owners struggling to enter the market.
The package will apparently include:
- abolishing stamp duty on all homes (existing and new) up to $650,000
- reducing stamp duty for all homes (existing and new) between $650,000 and $800,000
- providing a $10,000 grant for the building of a new home worth up to $750,000 (including building a home on vacant land)
- providing a $10,000 grant for the purchase of a new home worth up to for the purchase of a new home worth up to $600,000
- abolishing insurance duty on lenders mortgage insurance
- removing the entitlement to defer payment of stamp duty for 12 months on off the plan purchases by investors
Office of State Revenue
The stamp duty on the purchase of real property in New South Wales is collected and administered by the Office of State Revenue. As of last week, when we published our first article, there was no information about the new exemption on the OSR website and the staff were unable to give us any information about the exemption. Since then the OSR website has acknowledged the pending changes on their website, but it mostly just refers to the government's press release.
At the moment we cannot find any reference to the necessary legislation being introduced to Parliament to make required changes, though this does not necessarily mean that it will not happen before 1 July 2017. What it does mean is we cannot currently give you firm advice about what changes will be made, and whether you will be eligible.
Certainly the process of obtaining loan approval from a bank and searching for potential properties to purchase takes many weeks or months and there is no reason that a first home owner cannot start either of those processes now. What a first home owner should not do is sign any contract for purchase of land this month, unless they want the property so much that they are willing to spend $20,000+ on stamp duty that they probably won't have to spend from 1 July.
What should I do?
You can begin the process of calculating how much money you have or need to purchase a home, making your application for loan approval with your bank, and looking at what properties are available in your price range.
We have some articles about the cost of purchasing a home, to help you include things likes rates and removalists costs, as well as articles about things like Auctions. Below are some links to these articles.
Make an appointment to see Bruce Coode and obtain advice before you purchase your property. He will not charge you to look over contracts or discuss the potential purchase of a property with you for the first two or three properties. Bruce has been acting for people buying and selling property for forty years, he is experienced in dealing with stamp duty and stamp duty exemptions, and in dealing with government agencies like the Office of State Revenue. He will be able to help you understand what you are entitled to.
Bruce understands more than your basic conveyance and understands that for many people the purchase of a property is one of the largest financial decisions they will make. He will explain things to you in plain English and help you to navigate the stressful situation that is buying a house.
If you want more information about us generally, or purchasing a property specifically, then have a look at our other articles on this topic by clicking on the link to the right.