08 June 2010
Todays NSW State Budget will give an unprecedented boost to new home construction, according to the Urban Taskforce.
This plan is comprehensive it offers real hope for homebuyers and renters, Mr Gadiel said.
Mr Gadiel said the plan contained two zero stamp duty initiatives, described as the ˜NSW Home Builders Bonus.
Firstly, from July 1 this year, no one will pay stamp duty if they are buying a home worth up to $600,000 off-the-plan in the pre-construction stage. This will save home buyers up to $22,500. At the same time there will be a 25 per cent cut in stamp duty for those who buy later in the development process, once construction starts or a home is newly completed. This will save home buyers up to $5,600. This initiative is budgeted to cost $120 million over two years.
This is a fundamental re-shaping of the stamp duty regime so that it supports new housing development, Mr Gadiel said.
Victorian home construction has been strong, despite the global financial crisis, partly because of their stamp duty concessions encourage the off-the-plan purchase of new homes.
This measure has helped Victorian developers secure the necessary pre-sales to obtain bank finance.
However, the Victorian scheme is only a stamp duty concession, not an exemption.
While an off-the-plan purchaser in Victoria will pay no stamp duty on construction component of their purchase, they do pay stamp duty on the land value.
NSW has trumped the Victorian approach by providing a complete exemption from stamp duty.
Secondly, from July 1 when people aged over 65 purchase a newly-constructed home worth up to $600,000, they will pay no stamp duty a saving of up to $22,500. This exemption applies irrespective of stage of a homes construction.
This is a welcome recognition that 30 per cent of the new homes we require have nothing to do with population growth and everything to do with demographic change within our existing population, Mr Gadiel said.
Well be needing many tens of thousands of new homes for older Australians looking to sell their larger family home and use the proceeds to finance their retirement.
This targeted stamp duty concession is a welcome message of support to older Australians and will help industry focus on meeting their housing needs.
When older Australians make the decision to down-size, they will also be freeing up underutilised existing housing stock which can be occupied by younger families.
Mr Gadiel said he was particularly pleased that the scheme had been announced for a full two year period.
The Housing Construction Acceleration Plan was only announced for two six month periods, Mr Gadiel said.
While this boosted approvals for medium and high density homes by 35 to 50 per cent, it benefits were limited by the short duration of the scheme.
The longer two year timeframe of the new stamp duty concessions allows more time for developers to acquire land and pursue approvals on the strength of the governments announcement.
Mr Gadiel said the reforms were not just limited to tax concessions:
- There is now a $20,000 cap on local government development contributions for new residential dwellings.
- Priority local councils can share in a $5 million Local Contribution Facilitation Fund when they fast-track local development contribution plans. Once completed, the Independent Pricing and Regulatory Tribunal will assess these plans against revised guidelines which limit the scope of plans to essential infrastructure.
- Local councils will be assisted to bring forward completion of comprehensive zoning plans, which incorporate housing and employment targets through the provision over two years of $10 million from a Local Environmental Plan Acceleration Fund. The focus of the program will be on priority councils in Sydney, the Lower Hunter and the Illawarra.
- Local councils that exceed their average residential building approvals and demonstrate superior performance against development assessment timeframes will be rewarded through a new two-year $20 million Building Approval Advancement Fund. This assists councils with additional infrastructure costs associated with growth.
- Funding has been provided to the Department of Planning for a $2 million two-year pilot Council Assistance Scheme to help councils in high growth areas process development applications. This scheme will allow for the processing of development applications for in excess of 1,000 new dwellings a year.
- $2 million will be provided for work on a new Transit Oriented State Environmental Planning Policy that aims to streamline rezoning processes for nominated sites near transport infrastructure.
- A review of development regulations and development control plans will identify and remove inappropriate restrictions on housing development.
- A total of $2 million has been allocated to support initiatives around land release.
- Coordination between State agencies will be improved through a new Land and Housing Supply Coordination Taskforce. The Taskforce will be charged with implementing strategic planning targets through councils, making recommendations on council payments, and overseeing a review of development regulations.
This is a wide-ranging program of reform, Mr Gadiel said.
On the back of this budget we expect the urban development industry to take a fresh look at NSW.
This is good news for homebuyers, renters and anyone who cares about our urban communities.
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 $78 billion to the national economy each year and creates 849,000 direct jobs.