With the dawn of a new financial year, we can expect a band of first home buyers to flood the already saturated property market. Since the Federal Budget in early May and subsequent state budget announcements, the market is braced for a considerable upturn in first home buyer bidding at auctions from July 1.
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In NSW, the state government announced that come July 1, first home buyers will be exempt from stamp duty when purchasing property valued up to $650,000, and offered stamp duty relief for properties up to $800,000. While this may help apartment hunters hoping to jump on the market, those looking to purchase a house will continue to be forced to search west as the average house price in Sydney sits comfortably north of $800,000. Those purchasing homes up to $600,000 will also gain access to a new $10,000 grant.
In Victoria, first home buyers who buy either new or established properties for up to $600,000 will pay zero stamp duty. Whilst, those first home buyers purchasing Victorian properties between $600,000 and $750,000 will be eligible for concessions on a sliding scale. Further south, Tasmania will extend its $20,000 first home builders grant for a further 12 months rather than its scheduled drop to $10,000 from July 1.
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After the slight dip in Sydney and Melbourne auction attendance and dwelling values observed in May, property economist Tim Lawless predicts price rises ahead as the hoards of first home buyers who have been holding off until the new financial year enter the market.
Following these recent changes, the Queensland, Western Australian and the South Australian governments have refused to buckle under the pressure and alter their stamp duty restrictions.
The biggest losers from this year’s recent changes are foreign investors whose transfer duty has just doubled to 8 per cent in NSW. That combined with the implementation of the ghost house tax and an initiative to prevent foreign investors from purchasing more than half of the properties in any new property developments might take some heat out of the market.
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