First-home owners in NSW may soon be able to get a little extra help entering the property market with the state government unveiling plans to offer up $25,000 grants.
The proposal would see grants replace the existing stamp duty concessions available to first-home buyers, in a bid to make home ownership more accessible.
The grant is part of a wider set of measures put forward in the Treasury’s NSW Property Tax Proposal progress paper, another of which is to give homebuyers the option of either paying stamp duty or an annual property tax based on their land value and property use.
NSW Treasurer Dominic Perrottet said in the progress paper that the reforms could see 300,000 more residents become homeowners.
“Making home ownership a reality for more of our people is an indispensable part of lifting living standards across NSW,” the treasurer said.
“Those are two fundamental motivations for proposing a once in a generation reform to the property tax system: taking our economy up another gear, and improving home ownership for NSW residents, particularly younger generations.”
Encouraging first-home buyers into the property market is a key part of the reforms, with the paper noting that buyers are entering the property market at a later stage in life.
From 1995-96 to 2017-18 the average age of a first-home buyer has increased from 33 to 35 years. Over the past two decades the share of first-home buyers aged under 35 has declined from 69% to 55%.
First-home buyers have been facing an increasingly tough time breaking into the property market as property prices rise. It’s hoped that a switch to an annual land tax over stamp duty would help ease the upfront cost of purchasing a home for all first home buyers, not just those purchasing lower priced properties.
A lift in the first-home buyer grant would also be a step in helping government concessions keep pace with growing property prices.
At present the NSW Government offers a $10,000 grant for those who build or buy a first home worth up to $750,000. A full stamp duty concession is also available for first-home buyers purchasing a home up to the value of $650,000, with partial concessions available for properties worth up to $800,000.
It’s unclear when the proposed reforms might come into effect, however the state government is asking for feedback on the NSW Property Tax Proposal progress paper until July 30.
Feedback on the document can be sent to TaxReformTaskforce@treasury.nsw.gov.au.