NSW Treasurer Mike Baird defends timing of changes to home buyer handouts
NSW Treasurer Mike Baird has defended the government’s timetable of changes to handouts available to first-home buyers, non-first-home buyers and investors announced in the state budget.
The changes initially grabbed favourable headlines due the size of first-home owner grants –up to $35,240 for those purchasing a new home – but the artificial deadlines has since been heavily criticised for killing off the investor market and encouraging first-home buyers to wait until after October 1.
The program of changes, announced on June 12, gave investors (and non-first home buyers) just 18 days to complete off-the-plan purchases to take advantage of a a zero stamp duty option – and the potential saving of $22,490 through the NSW home builders' bonus, which ends on June 30.
For first-home buyers, the state government decided to scrap the $7,000 first-home owners’ grant entirely for established home purchases and replace it with a $15,000 grant for new homes – but only from October 1.
This means that many first-home buyers are likely to put off their new home purchases until after October 1, when there will be up to an additional $8,000 up for grabs.
The executive director of the Housing Industry Association, David Bare, expects the three-month lag would be felt in the construction market and could have a significant impact on the cash flow for builders.
Meriton boss Harry Triguboff says this three-month time frame will be “hopeless” for developers targeting the first home-buyers’ market.
But a spokesperson for NSW Treasurer Mike Baird told Property Observer the three-month notice period for first-home buyers “provides a reasonable timeframe for the market to adjust to the changes and is in line with the timeframe applied to stamp duty concession changes in last year’s budget”.
In the 2011-2012 NSW budget, delivered on September 6 last year, Baird gave first-home buyers just under four months’ notice that stamp duty concessions under the first home plus scheme would be limited to the purchase of newly constructed homes (including off-the-plan purchases) from January 1 this year under a new scheme, the first home – new home scheme.
The expired first home plus scheme meant borrowers did not have to pay any stamp duty for homes under $500,000 – a saving of up to $17,990.
The spokesperson for the Treasurer also said the home builders’ bonus had been due to expire on June 30.
“However from the July 1, the NSW government will introduce the new home grant of $5,000 which will go to all non-first-home buyers of new properties up to $600,000.”