First homeowners’ stamp duty cuts to be abolished in New South Wales

First homeowners in New South Wales might be busy saving for a home deposit –  but they now only have until January 1, 2012, to be exempt from stamp duty for homes up to $600,000.

The shock move to abolish stamp duty cuts for first homebuyers was the centrepiece of the NSW State Budget, handed down today, and it’s expected the measure will save more than $1 billion over four years.

While first homebuyers won’t be happy about the move, builders and developers have welcomed it, due to the fact that stamp duty concessions will still apply to newly built homes.

Urban Taskforce chief executive Aaron Gadiel says the measure will help boost the state’s supply of new housing.

“This reform will remove the current scheme’s inflationary impact on home prices and will make more housing available to more people,” he says.

“In our supply constrained home market, the existing first homebuyer stamp duty concessions inflate home prices across the board. But this hasn’t addressed the high cost of supplying newly built homes to the market.

“By tying stamp duty concessions exclusively to new housing, the inflationary impact on existing housing will be removed and brand new homes will be more attractive to homebuyers. This improves the financial viability of NSW home development and will make it easier to secure capital for new residential projects.”

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