NSW retirees are being coaxed into selling their oversized houses and downsizing to newly-built residences, in a NSW budget plan aimed at boosting the new homes industry.
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Home owners aged over 65 are being offered stamp duty savings up to $22,490 to encourage them to move.

The discount applies to purchases of newly-constructed houses and units, off-the-plan acquistions, and house and land packages.

The senior downsizers will pay zero stamp duty on property purchases costing up to $600,000 in what is billed as a policy-first for the housing market.

About 70 per cent of NSW sales are under $600,000.

NSW houses have a $546,000 mean price, and units a mean of $457,000, according to the most recent Housing NSW data.

The state government scheme extends stamp duty cuts from the traditional preserve of first homebuyers, who have preferred to buy established residences, as part of its concerted attempt to kickstart the ailing residential construction industry.

The budget also offers zero stamp duty – and the potential saving of $22,490- to all home buyers and investors, albeit with a strict restriction.

It will only be available if they put a deposit down for an off-the-plan purchase or house and land packages costing less than $600,000.

There will also be a 25 per cent stamp duty cut for home buyers and investors – and a potential $5623 saving – if construction is already underway.

The stamp duty discounts will be available for the next two years.

NSW Treasury expects between 1000 and 2000 seniors to take up the offer annually following its July 1 start date.

Another 5000 to 6000 investors and home buyers are expected to take up the wider off-the-plan offering, at an annual $60 million cost to revenues.

The government has budgeted for the seniors zero stamp duty initiative to cost $10 million in each of the next two years.

The seniors must sell their primary place of residence to move into the newly-constructed house or unit.

“For people aged over 65, it won’t matter at what stage of construction the home is – they will pay no stamp duty,” NSW Treasurer Eric Roozendaal said.

The newly constructed homes for seniors must not have been previously occupied or previously sold.

For couples, at least one of the parties must be aged 65 or over to be eligible.

The initiatives are designed to help lift the NSW housing construction out of the doldrums.

NSW housing construction has been trailing Victoria for the past five years and Queensland for the past four years.

Last June, NSW housing construction fell to record lows when just 422 units and townhouses were approved, compared with the previous 10-year June average of 1400 approvals.

“The zero transfer duty for people aged over 65 will contribute both to the goal of helping older home owners seeking to downsize their home, and the goal of encouraging new home construction,” the budget papers said.

“The greater concession for purchasing off-the-plan will assist the financing of new developments.”

Jonathan Chancellor is The Sydney Morning Herald’s Property Editor.