The New South Wales government will temporarily increase the price threshold at which stamp duty does not apply for first-home buyers of newly constructed dwellings. People buying their first home in the state currently pay no stamp duty on new homes that cost up to $650,000, but this will be increased to $800,000 from 1 August with tapered discounts for properties valued up to $1 million:
“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,” Ms Berejiklian said.
The stamp duty waiver also applies to vacant land valued up to $400,000, with the state government anticipating more than 6000 first-home buyers to participate in the scheme…
Property Council acting NSW executive director Belinda Ngo said the NSW government’s announcement represents a “win-win” for first-home buyers and the housing construction sector, which was already wrestling with a pre-pandemic slowdown…
“This temporary measure will help to protect the jobs of almost 400,000 people who rely on this sector for employment while continuing to deliver housing in our communities,” Ms Ngo said.
As illustrated by CoreLogic last week, NSW is facing a monstrous supply glut, with construction rates running well ahead of the decade average in the face of collapsing immigration:
Thus, alongside the Morrison Government’s HomeBuilder program, first home buyers are being used as patsies to fill the void.
The big winners from these stamp duty concessions (alongside HomeBuilder) will obviously be large developers, whom will be able to inflate the cost of new homes, alongside clearing their inventory.
The big risk is that these grants will leave a gaping big construction hole next year after the subsidies expire, so expect more of the same to be announced.
Basically, this is more classic ‘can kick’ economics from our governments aimed squarely at pulling in more suckers to support the bubble.