2017 changes for stamp duty in NSW: what you need to know
Published 10 Jul 2017
A new housing affordability reform package in NSW was announced at the beginning of June that will abolish stamp duty for first home buyers spending up to $650,000, according to the NSW government. This is great news for families looking to buy their first home, but won't make a whole lot of sense unless they understand what stamp duty is.
A property levy required by the NSW government, the tax can be difficult to understand and even harder to calculate. Let's look at the definition of stamp duty - also known now as 'transfer of land or business duty' - as well as the recent law updates in NSW.
What exactly is stamp duty?
Transfer of land or business duty, according to the government's website, is a duty that must be paid to cover the costs of changing the title and ownership details of property. It is required in the following circumstances:
- The transfer or sale of land
- The transfer or sale of a business asset
- The placement of a trust over land or assets in NSW
This means that when buying a home, the purchaser is liable to pay a duty (the amount of which varies depending on the situation) to the government. In some cases, purchasers can combine various transactions for multiple properties into one duty owed to the government.
The current stamp duty on properties between $300,000 and $1m begins at nearly $9,000, meaning purchasers must pay this in addition to the price they're paying for the land or home, according to the NSW government.
Recent law changes
Housing prices in NSW, particularly in Sydney, are skyrocketing, meaning more and more people are having difficulties affording houses. This new housing affordability package came into action at the beginning of July 2017 and has three main goals, according to the government:
- to increase housing supply and manage the costs
- to increase concessions given to first home buyers
- to continue to build infrastructure in developing communities
In addition to abolishing stamp duty on houses below $650,000, the new laws will provide relief for purchases up to $800,000 and offer grants to individuals who wish to build their own homes. Another important component will be increasing the duties paid by foreign investors - this is intended to balance out the ratio between domestic and foreign purchases of land.
If you are buying or selling property in NSW and would like representation, or if you have any questions about stamp duty, please reach out to a Paramatta lawyer at Malouf Solicitors today.
Please call us on 02 8833 2000 to speak with a lawyer
I would just like to say thank you to Anthony who assisted my son in his matter. He is a first home buyer and was pressured into signing a contract prior to obtaining legal advice. The contract was certainly was not the normal straight forward type. To be able to obtain the help and assistance he did from Anthony and rescind the offer the next day, was wonderful. We were able to have a stress free Christmas. I am unable to thank him enough for this. My son and our family will be contacting Anthony when we find the next property.
Kim of Sydney