As part of the NSW 2020 budget, NSW Treasurer Dominic Perrottet announced that the state government will open a public consultation to put forward changes to Stamp Duty on owner occupied homes.
Under the proposed model home buyers would be able to choose between paying Stamp Duty up front or an annual property tax instead. The proposal would only apply to owner occupied property purchase so property investors would not benefit from the changes.
The change could assist in eliminating the barrier of entry for first home buyers trying to save for a home deposit and help families reduce costs when looking to move home.
First home buyers already receive a stamp duty exemption up to $650,000 and partial exemption up to $800,000. Under the new changes, instead of a stamp duty exemption, the state government could offer a grant of up to $25,000 to offset the tax or to refurbish the home.
Below is the current stamp duty cost in NSW based on property value:
- Purchase price $500,000 – Stamp duty $18,311
- Purchase price $1,000,000 – Stamp duty $40,811
- Purchase price $1,500,000 – Stamp duty $68,311
- Purchase price $2,000,000 – Stamp duty $95,811
Treasurer Dominic Perrottet had this to say, “It (stamp duty) adds tens of thousands of dollars to the cost of the biggest financial commitment most people ever make. If you want to move, change jobs, or switch careers, upsize or downsize to match your family size, stamp duty can be the spanner in the works”
If passed, the changes could come into effect mid to late 2021. More to come