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Are you a First homebuyer?

Will you feel the pinch as the stamp duty threshold is lowered?

The first home buyer (FHB) transfer duty exemption will be adjusted to provide a full exemption on the purchase of an established home of $430,000 or less, down from the current threshold of $500,000. The concession will then phase out between $430,000 and $530,000 with duty assessed at the rate of $19.19 per $100 or part thereof up to $530,000 (down from the current $600,000).  This change is due to commence from the later of 1 July 2014, or the day after the amending legislation receives Royal Assent where Assent is granted after 1 July 2014.

The amendments to the first home owner rate of duty will apply to those contracts entered into on or after the commencement date.

What does this mean for a FHB?

The lowering of the threshold will mean a FHB planning to purchase a $500,000 property will need to find an additional $13,433 for transfer duty in addition to their deposit required by their bank. The lowering of the threshold for FHBs will mean demand for properties on the market at this price point will be in higher demand until the effect comes in and then demand will soften at that price point and move to the lower threshold of $430,000 and below.

Contemplating selling?

Any property owners who are contemplating selling a property they own at the $500,000 price point should consider listing their property for sale sooner rather than later to try and capture the higher demand before the change comes into effect. For example a $530,000 property purchase currently attracts transfer duty for a FHB of only $6,753 which will increase to $19,190 under the new lower threshold.

Can we assist you with the sale or purchase of your home?  Please contact us. - Rob Walker

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