First home buyers to have edge over investors under NSW housing affordability package

Sarah Gerathy| ABC

http://www.abc.net.au/news/2017-06-01/nsw-first-home-buyers-to-have-edge-over-foreign-investors/8580042?section=business

First home buyers could save up to $34,000 under the NSW Government’s new suite of housing affordability measures, according to Premier Gladys Berejiklian.

The Premier said the measures were designed to give first home buyers a competitive edge when bidding against investors.

The measures, which come into effect on July 1, include:

• Abolishing stamp duty for first home buyers on existing and new homes up to $650,000 and introducing stamp duty discounts for properties worth up to $800,000
• Scrapping stamp duty charged on lenders mortgage insurance when it is required for first home buyers with limited deposits
• Doubling the foreign investor surcharge from 4 to 8 per cent on stamp duty — overseas buyers will also pay a 2 per cent surcharge on land tax.
• Local investors purchasing off-the-plan properties will no longer be able to access stamp duty concessions.

“We’re doing everything we can to level the playing field for first home buyers,” Ms Berejiklian said.

She said the measures were estimated to cost the State Government about $1.2 billion, but the increased surcharge on foreign investors would help pay for it.

The Premier has previously said she was reluctant to radically overhaul stamp duty or first home buyers grants in case it generated fresh heat in the market or had other unintended consequences.

But she said she the former Reserve Bank governor Glenn Stevens had given the plan his tick of approval.

“He noted to me that he felt the package we were putting forward was well balanced,” Ms Berejiklian said.

She argued the number of home buyers entering the market had been declining in recent years, which had changed things.

“We feel given the way wage growth has been, and what’s happening out there in terms of first home buyers that we needed to take some measures on the demand side as well.”