Not only is the Sydney property market heating up with the onset of Spring, but some new changes effective from 1 October 2012 will also really help to boost real estate sales, and to give new home buyers a real helping hand to break into the real estate market, especially in the low to middle price range.
First Home Buyers that have been saving for a considerable amount of time to crack the Sydney property market can now access some significant government assistance that could help get them into their own home much faster. This, combined with the latest interest rate cut, and more banks returning to a 95% lend rate, means things are looking great for first home buyers.
These changes will also have a significant impact on the property investment market, with buyer confidence up as a result of these incentives, as well as the recent interest rate cut.
The First Home Owner Grant rules in NSW have changed and are now offering benefits worth up to a total of $35,000, broken down into a $15,000 cash grant, and up to $20,000 in stamp duty exemptions.
Here's the details:
The First Home Owners Grant (FHOG) – NSW
From 1 October 2012, first home buyers purchasing new property in NSW may receive grants and stamp duty exemptions worth up to $35,000, giving the chance for buyers, or investors, to get into the market far earlier than they may have dreamed.
There are two components to the concessions:
1. First Home Owner Grant (FHOG)
First home buyers purchasing new residential property below $650,000 are eligible to receive a Government grant of $15,000 upon settlement.
Dates applicable Cap amount Grant Property type
1 Jan 2011 to 30 Sep 2012 $835,000 $7,000 New or existing
1 Oct 2012 to 31 Dec 2013 $650,000 $15,000 New only
1 Jan 2014 + $650,000 $10,000 New only
First home buyers purchasing second hand properties are no longer eligible to receive any grant.
2. First Home - New Home Scheme (Stamp Duty)
From 1 October 2012 first home buyers purchasing new property below $550,000 or vacant land below $350,000 will be exempt from stamp duty.
First home buyers purchasing new property from $550,000 to $650,000 or vacant land from $350,000 to $450,000 will be eligible to receive stamp duty discounts.
Stamp duty concession Purchase price Property type
Exempt up to $350,000 Vacant land to build
Exempt up to $550,000 New only
Discount* $350,000 to $450,000 Vacant land to build
Discount* $550,000 to $650,000 New only
* Stamp duty discounts are calculated based on the purchase price. For each additional $1,000 in cost above the stamp duty exemption threshold, the full exemption will be reduced by 1%. Example: a new home purchased for $560,000 ($10,000 above threshold) would receive a 90% discount on the applicable stamp duty.