Stamp Duty is the most expensive purchase cost affecting home buyers. On a property with a purchase price of $800,000.00, the total stamp duty payable is approximately $31,510.00. It surpasses legal fees, mortgage fees, removalist costs and is often the deal breaker for home buyers when deciding on a property.
For first home buyers at least, there is relief in sight.
The NSW Government has recently announced new initiatives for first home buyers to make it easier to enter into the property market, whether it’s as a first investment or a first home. These changes will take effect on 1 July 2017.
There will be a complete abolition of stamp duty on both new and existing properties with a purchase price of up to $650,000.00, and reductions on stamp duty payable on properties with a purchase price between $650,000.00 and $800,000.00. With a median house price of $743,000.00, Sydney is one of the most expensive places in the world to live, so every cent in savings will count.
The removal of the application of the stamp duty exemption and concessions on just new properties means that there are a lot more eligible properties on the market, and waiting times are reduced as first home buyers no longer need to wait for the construction of the property. They can move in straight away once the settlement has occurred, usually within 6 weeks of signing the Contract.
What about people who have previously owned Property?
As most properties in Sydney are valued at over $1,000,000.00, it can be difficult to raise the additional funds required to buy a property.
For people who do not have the required amount of personal funds to contribute on top of the loan to purchase property, there are some financing options available where the bank will lend more than the standard 80% loan ratio provided the home buyer obtained lender’s mortgage insurance (“LMI”).
There is additional stamp duty payable on LMI, which has also been abolished as part of the NSW Government’s housing affordability initiatives.
If you are thinking of purchasing a property either as an investment or to live in or require more information about stamp duty, please contact our specialist Property Lawyers.
