NSW Stamp Duty Changes
It’s not really "breaking news", but more recent news . On the 1st June the NSW premier Gladys Berejiklian announced that stamp duty would be removed for first home buyers of ‘existing’ previously occupied homes up to a purchase price of $650000. There will also be stamp duty concessions for these buyers up to a purchase price of $800000 . The changes take effect from 1st July 2017. Prior to the changes first home buyers were only entitled to stamp duty exemption where they were purchasing land & constructing a home to live in , or where they were purchasing a home to live in, that had not been previously occupied. This follows the Victorian premier’s announcement earlier in the year. For NSW, it forms part of their recently released ‘’Housing Affordability Package’’.
The interesting question that this raises is, does this action operate counter to Federal Government regulators attempts over recent years to stem property price rises essentially caused by foreign investment directly into property? Ex Reserve Bank Governor Stevens has warned that such subsidies are "self-defeating" & only serve to raise property prices. To partly offset this the NSW Government as part of this package , announced a (3) billion infrastructure spend looking to boost the housing supply side . That spending is focused on roads , public spaces, community centres , in addition to bringing in interest rate subsidies for eligible development projects (most likely housing related).
There are already signs in the housing market, particularly in the metropolitan areas of Sydney & Melbourne that suggest property prices have peaked . Auction clearance rates have slowed , as has home loan approvals. The impact of tighter credit policy from lenders & the prudential changes made by regulators, appear to be now having the desired effect of slowing property prices. So in light of this, maybe these changes to stamp duty for NSW first home buyers are well timed? A sharp decline in property market values would also have a negative impact on other sectors of the community. Property investors are one sector that come to mind.