16 June 2009
The NSW Governments stamp duty reduction for new homes is the strongest measure taken by any government in Australia to support new home construction, according to the Urban Taskforce.
Under the new Housing Construction Acceleration Plan, from 1 July until 31 December 2009 purchasers of newly constructed homes, other than first home buyers, will only pay half the normal stamp duty on purchases of up to $600,000 in value.
For a $400,000 purchase, there will be saving of just under $7,000 and, for a $500,000 purchase, a saving of close to $9,000. The maximum benefit goes to a purchase of a $600,000 home, where the saving is just over $11,000. The scheme is expected to cost $64 million.
Even the Federal Governments very successful First Home Owners Boost only delivered an extra $7,000 for the purchase of a newly-built home, Mr Gadiel said.
This new six month scheme will deliver a larger grant for many newly built homes and far more people will benefit not just first home owners.
Some people who arent first-time home buyers are now likely to bring forward their home purchase to take advantage of this grant.
The government has also extended its $3,000 grant, for first home owners who buy a newly-built home, until June 2010 six months past the scheduled expiry of the Federal Governments First Home Owners Grant.
Mr Gadiel said that the residential development and construction industry will hear this message loud and clear.
The NSW Government has put its money where its mouth is theyre clearly serious about supporting a construction led recovery, he said.
Mr Gadiel said that the new $200 million Local Infrastructure Fund was also a very welcome measure that will re-build development industry confidence.
The NSW Government will make available up to $200 million in interest free loans to NSW councils to fast-track local infrastructure projects.
Too many developer projects have been hamstrung by local councils failing to commit to building up local infrastructure, Mr Gadiel said.
The state government has recognised this problem and come up with a welcome solution.
The new fund will target high-population growth areas where new developments are underway or planned for construction. The program will leverage unspent development levies held by local councils.
Local councils will now have no excuse for sitting on the development levies theyve collected from home buyers, Mr Gadiel said.
Until now, councils have been able to claim that they could not spend up to $1 billion in development levies because the money was tied to specific projects, and they lacked the cash to fully fund their construction.
The state government has provided a simple mechanism for councils to top development levies with an interest free government loan – enabling them to build local roads, roundabouts, bridges and playgrounds right now, when theyre needed.
The number of construction starts on new homes in NSW has been in serious decline since 2002. In that year work started on 48,000 homes, but by 2008 this figure has almost been halved – with work starting only 26,900 homes.
The last six months of home approvals suggests Victoria will be building two houses for every one built in NSW and they will match NSW in terms of apartment and town house construction, Mr Gadiel said.
Todays measures will help restore NSWs share of national new home construction.
For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
The construction activity made possible by property developers contributes $69 billion to the national economy each year and creates 709,000 direct jobs. The construction industry is Australias third largest source of employment.
