The NSW government is pushing ahead with a $78 million stamp duty relief measure to support the economy amid the COVID-19 pandemic.
NSW Premier Gladys Berejiklian on Monday announced stamp duty will be eliminated on newly-built homes below $800,000 – the threshold was previously $650,000 – with the concession reducing on higher values before phasing out at $1 million.
The state government expects more than 6000 first home-buyers to benefit from the changes, in a move set to cost the NSW budget about $78 million.
Ms Berejiklian said the change to stamp duty thresholds would support new home construction and create jobs.
“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,” the premier said in a statement.
Under the changes the stamp duty threshold on vacant land will rise from $350,000 to $400,000 and will phase out at $500,000.
The change to the thresholds will only apply to newly-built homes and vacant land – not to existing homes – and will last for a 12-month period, commencing on August 1.
Other purchases will continue to benefit from existing schemes.
NSW Treasurer Dominic Perrottet said the changes would save first home-buyers up to $31,335 on a new $800,000 home and up to $15,668 on a new $900,000 home.
Mr Perrottet said the NSW government was prepared to put the state’s economy before its budget.
“It’s the great Australian dream – to buy your first home and we want to get as many young families into the housing market as possible,” he told reporters on Monday.
The treasurer has previously indicated he wants to abolish stamp duty as part of a bid to revive the economy.
Housing Industry Association NSW executive director David Bare welcomed the announcement as he said the changes would make stamp duty arrangements “better reflect” the price of new homes across the state but in particular Sydney.
“This initiative will have positive outcomes for the housing industry and the NSW economy as a whole,” Mr Bare said in a statement on Monday.
The unemployment rate in NSW rose to 6.9 per cent in June as the national rate hit a two-decade high.