Covid-19 Recovery Plan Announcements to assist the Property Industry
As part of the Covid-19 Recovery Plan, the NSW Government has recently announced:-
- Updates to the thresholds on which stamp duty are charged on new homes or vacant land (intended to be built upon) for first home buyers; and
- A land tax discount for new build-to-rent housing projects.
These initiatives look set to boost first home buyer activity and housing construction across New South Wales as well as provide greater surety for renters and support jobs during the Covid-19 Pandemic.
Stamp Duty Changes for First Home Buyers
The threshold above which stamp duty is charged on new homes or vacant land (intended to be built upon) for first home buyers will increase from:
- $650,000 to $800,000 in relation to new homes; and
- $350,000 to $400,000 in relation to vacant land on which you intend to build.
Stamp duty rates have also been reduced as follows:
- in relation to new homes valued between $800,000 and $1,000,000; and
- in relation to vacant land on which you intend to build valued between $400,000 to $500,000.
The above thresholds will be in place for 12 months and will apply to contracts executed from 1 August 2020 to 31 July 2021.
Land Tax Discount for New Build-to-Rent Housing Projects
Whilst the full criteria for build-to-rent projects will be published in the coming weeks, the NSW Government has indicated that the land tax discount will be equivalent to at least a 50% reduction in land tax (dependent on the unimproved land value).
To be eligible for the discount, a build-to-rent development in metropolitan areas must be for at least 50 units. A different threshold for regional areas will be considered in the coming weeks.
A further criterion is that the construction of the build-to-rent development must have commenced on or after 1 July 2020 and the projects must provide purpose built rental units, be managed under unified ownership and include options for longer leases. The land tax discount will last until 2040.
If you or someone you know has any questions regarding eligibility or are looking to purchase their first home or even if you are interested in Property Developments such as build-to-rent, please do not hesitate to contact our Property Team on 02 9212 1099.