NSW Treasurer Dominic Perrottet has unveiled a budget "that builds for the next generation" in his budget speech on 20 June 2017.This year's budget is said to prioritise investment in the "trifecta" of infrastructure, healthcare and hospitals, as well as education, however, a review of the budgeted spending shows that infrastructure is the key focus of this budget.
In better news for home buyers, the budget also includes significant savings on taxes related to purchasing property as part of the NSW government's 'First Home – New Home' scheme, designed to address housing affordability.
Many of the benefits of the 'First Home – New Home' scheme were announced in the lead-up to the budget, the major benefits available include:
- As part of the NSW housing affordability package, first home buyers of existing and new properties costing up to $650,000 will be exempt from paying stamp duty from 1 July 2017 (up from the existing $550,000 and now including existing homes), with transfer duty discounts for properties valued at up to $800,000.
- The retention of the $10,000 First Home Owner Grant for buyers of new homes valued at up to $600,000, and the introduction of a $10,000 grant for those building their first home valued at up to $750,000.
- Shared equity arrangements for first home buyers with Community Housing Providers.
- Doubling of the foreign investor transfer duty surcharge from 4% to 8% with effect from 1 July 2017.
- Increasing the foreign owner land tax surcharge from 0.75% to 2% with effect from 1 July 2017.
- The introduction of foreign developer surcharge rebates to Australian-based foreign developers if they sell the developed properties within five years. This change is to be backdated to apply from when the transfer duty and land tax surcharges first applied.
- The targeting of the off-the-plan deferral of transfer duty for residential off-the-plan purchases to owner occupiers only with effect from 1 July 2017. Currently, local purchasers are able to defer transfer duty until completion of the sale or 12 months after the contract, whichever occurs first.
- The abolition of insurance duty on lenders mortgage insurance with effect from 1 July 2017.
There was also some good news for small businesses:
- Exempting small businesses with a turnover of less than $2 million from duties on insurance (which currently applies at the rate of 5% - 9% of the premium) for commercial vehicles, professional indemnity, as well as product and public liability (but not medical indemnity insurance) with effect from 1 January 2018.
Full details of the budget announcement are available here: www.budget.nsw.gov.au