The NSW government will temporarily scrap stamp duty on homes worth less than $800,000, with around 6,000 buyers set to receive the benefit, Premier Gladys Berejiklian said on Monday.
The scheme is available to first-home buyers and builds on the $10,000 first-home owner grant which is accessible to those purchasing a home worth less than $600,000 or for those building a home worth $750,000 or less.
The stamp duty concession sees the threshold for stamp duty increased from $650,000 to $800,000. For homes worth between $800,000 and $1 million, the concession gradually phases out, Berejiklian told the Sydney Morning Herald on Monday.
First-home buyers purchasing vacant land will also be able to escape stamp duty if the land is worth up to $400,000, rather than $350,000 previously. Then, for land worth between $400,000 and $500,000, the payment will phase out.
This means that a home buyer could score a discount up to $32,335 with the $10,000 grant.
It will apply to newly-build homes and vacant land and will last for one year from 1 August.
“Thousands of people will see their bank balances benefit from this change – it will help get more keys into more front doors of more new homes,” Berejiklian said.
“It will also boost housing construction across NSW and support jobs in the building industry at a time when we need them more than ever before.”
State Treasurer Dominic Perrottet said the relief program will cost $78 million.
“Today's announcement will help to drive economic and job's growth into the future. It is the great Australian dream to bow your first home and we wanted to get as many young families into the housing market as possible,” he said.
Stamp duty is the state’s second-largest revenue stream, with stamp duty often costing as much as $40,000 in cities like Sydney and Melbourne.
The decision comes after a major review into the state’s finances proposed an end to stamp duty, to be replaced by a broad-based land tax.
The same report also suggested GST be hiked to offset the loss.