From January 1, 2012, New South Wales first home buyers will only be eligible for a stamp duty exemption on newly built and “off the plan” homes.
These changes will significantly disadvantage a large majority of first home buyers, as over 80% of homes bought in NSW are existing properties.
Consequently, NSW first home buyers will need 3% to 4% more when purchasing an existing property.
They may also find it harder to save for a deposit, resulting in a greater reliance on 95% LVR loans.
Guarantor mortgages affected too
Additionally, guarantor loans are expected to become the main method used by NSW first home buyers as they allow you to borrow the full cost of the home, as well as stamp duty.
As the deadline gets closer there is a strong chance that the prices of houses will rise, so it would be best for NSW First Home Buyers to act quickly and buy as soon as possible.
If you are a NSW first home buyer try to purchase a property before the end of the 2011 year.
If you are a NSW first home buyer and were to purchase a property before January 1 2012 with a value of $500,000 you would save $17,990 !
No deposit home loans available
Did you know that there are some lenders that can lend 95% of a properties value as well as a credit card of up to $20k at home loan rates? Borrowers must have 5% in genuine savings to qualify, however the banks can now effectively lend funds to cover the stamp duty.
For more information, please see our First Home Owners Grant guide.
The article from News.com.au
“In a major blow to those looking to get on the property ladder, the NSW Government has scrapped stamp duty concessions for 80 per cent of first-home buyers.
From January 1 next year, newcomers to the property market will no longer be able to avoid having to pay transfer title charges on existing homes under $600,000.
Stamp duty exemptions will now be restricted to newly built and “off the plan” properties only.
The NSW Budget: Dissected and in detail
The housing industry reacted angrily to a hike in stamp duties.
Real Estate Institute of NSW president Wayne Stewart said: “Australia weathered the last global financial crisis because the property market was invigorated. Yet those lessons have been ignored today.”
And he warned that a rush to beat the deadline would push up prices of existing homes.
“It is inevitable that, as first home buyers scramble to beat the January 1 deadline, we will see prices increase as demand exceeds supply,” he said.
“Unfortunately for some, the dream of home ownership will now become simply unachievable.”
Martin Real Estate managing director Jeremy Martin added: “Between now and January rivers of gold will flow but after the party there will be a hangover.”
The vast majority of first home buys in NSW – 42,000 out of 50,000 – being made on existing homes.
NSW is now one of the few states not to have a stamp duty concession for first home buyers purchasing existing homes.
However, construction and property groups welcomed the change and said the concession simply pushed up house prices.
“This reform will make housing more affordable for first-home buyers by boosting the new housing supply,” said Aaron Gadiel from the Urban Taskforce, a large developers’ lobby.
“Newly built housing will now be more competitive relative to existing housing. It should have been that way all along.”
He said the threshold for receiving the benefit, which tails off between $500,000 and $600,000, should be increased. “A first-home buyer with children looking to buy a three-bedroom apartment in Sydney will struggle to find one less than $600,000,” he said.
The Property Council of Australia said tying stamp duty concessions to new housing supply was “a smart choice”.
“Housing supply remains limp across NSW and gearing incentives to motivate the construction of new stock makes sense,” executive director Glenn Byres said.”
Source: News.com.au 07/09/11