On 26 July 2020, the NSW Government announced that the threshold above which stamp duty is calculated on new homes for first home buyers will increase from $650,000 to $800,000. A concession on the stamp duty payable will apply on homes valued at between $800,000 and $1million. For new homes valued at $800,000, that is a stamp duty savings of $31,335.
The stamp duty threshold on vacant residential land will also increase from $350,000 to $400,000 with the concession threshold increasing to $500,000. To be eligible for the stamp duty exemption on vacant land, purchasers must intend to construct to new home on the land.
The changes do not apply to established or existing homes.
The new thresholds will take effect from 1 August 2020 and will apply for 12 months on contracts signed and dated between 1 August 2020 and 31 July 2021.
This new initiative supplements the first home buyer scheme that is already in place. A $10,000 First Home Owner Grant (Grant) is available to those buying their first new home valued up to $600,000 or buying land and constructing a home with a total value of $750,000 or less.
To be eligible for both the Grant and stamp duty exemption on new homes, you (or at least one of the first home buyers) must satisfy the residence requirement. That is, you must move into the property within the first 12 months of buying the property (calculated from the settlement date). If you are buying land and constructing a home, you must move into the property within 12 months after construction is complete.
You must reside in the property for at least six (6) continuous months. A common error for first home benefits recipients is leasing the property under a 12 months (or longer) residential tenancy agreement granting exclusive occupation to the tenant, from the settlement date. The landlord owner will not be able to satisfy the residence requirement in these circumstances.
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