No NSW state budget first home grant changes so $5000 January 2016 reduction deadline looms

No change to NSW first home buyer grants in the state budget could intensify activity before the grant’s 1 January 2016 reduction.

The grant for buyers of new homes is scheduled to be reduced from $15,000 to $10,000. 

While recipient numbers are up, first home buyers have been largely absent from the booming Sydney market, hesitant at purchasing new homes. 

Grants for established home purchases for first time ceased three years ago.

But the $5000 reduction could spark a Home World flurry over the next six months. 

The Government budget papers said it was continuing to target its first home owner assistance (grants and transfer duty concessions) to support the purchase or construction of new homes, which is helping increase the supply of new housing in NSW. 

In 2014, the Government provided 7,955 First Home Owner Grants for new homes, a 25% increase on the previous year.

A $15,000 grant is available to first home buyers where the value of the new home purchased does not exceed the First Home Owner Grant Cap of $750,000 for contracts dated on or after 1 July 2014.

The amount of the grant will reduce to $10,000 from 1 January 2016.

There is also a wider duty exemption on new homes valued up to $550,000 and vacant land valued up to $350,000.

A duty concession on new homes valued between $550,000 and $650,000, and vacant land valued between $350,000 and $450,000.

The recent strength in the Sydney property boom was being especially driven by properties valued over $1.2 million, the NSW State Budget revealed, but the housing boom longevity is not being assumed by the NSW Treasury.

NSW land tax revenues are forecast to rise at a faster rate than stamp duty revenues, according to the NSW state budget papers.