Now that the dust has settled, REINSW takes a look at what the NSW Budget really means for property professionals and consumers.
NSW Premier Mike Baird’s first Budget looked closely at NSW’s infrastructure and tourism budgets, however REINSW believes it failed to represent the growing housing market.
First homebuyers will now be able to spend up to $750,000 on a new home to qualify for the $15,000 First Home Owners Grant. The Budget also included an extra $83 million for a housing acceleration fund designed to open up land and expedite developments in south-west Sydney.
REINSW believes the decision by the NSW Government not to reintroduce the First Home Owners Grant for existing properties failed first homebuyers.
“The increase in the threshold of the First Home Owners Grant on new properties from $650,000 to $750,000 is welcomed, however it simply recognises the existing entry-level of new properties,” REINSW President Malcolm Gunning said.
“We believe Treasurer Andrew Constance and Premier Mike Baird are only going half way to support first homebuyers and the NSW Government should have broadened the grants to include existing properties.
“The Treasurer and Premier are out of touch with the wills and desires of first homebuyers. Providing incentives to first homebuyers of existing properties provides a more affordable entry point where they can add value.
“It also supports the gluttony of properties in dire need of renovation and improves the lower end of the market. The NSW Government is not taking advantage of the large number of properties that are on prime real estate and in urgent need of the care and enthusiasm first homebuyers can provide.
“Incentives for older Australians to relocate to regional areas would have helped to free up properties in in demand locations and we will continue to lobby the government on this important area.They must follow the lead of the ACT, which has implemented such incentives,” Mr Gunning said.
The Budget also included changes to the eligibility criteria for the New Home Grant. From 1 July 2014, the grant will be restricted to Australian citizens and permanent residents. The grant will also be restricted to one grant per person, per year.
“We applaud the move to restrict the New Home Grants to Australian citizens and the closing of the loophole which saw multiple applications for grants,” Mr Gunning said.
The amendments restrict eligibility for a grant under the New Home Grant Scheme to transferees who are declared an Australian citizen, Australian Resident or Australian-owned body.
Calls from REINSW to review stamp duty rates were vindicated in the Budget.
The Government had expected stamp duty on residential property market transfers to increase by 20.5 per cent. Revenue from residential property market transfers is now estimated to have increased by $938 million, or 35 per cent to $5,898,000, compared to the original budget estimate.
“Almost $1 billion of extra funding has come out of the property market. It is time to review stamp duty rates for the first time in 40 years and give the extra incentives to first homebuyers and older Australians,” Mr Gunning said.