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Posts Tagged ‘NSW’

NSW State Government – Jobs Focus

Posted by Mark Mendel in Sydney Property News on 09 30th, 2011

BARRY O’FARRELL will promise to create half a million jobs over the next decade, using his government’s landmark first budget to launch a plan to reignite the NSW economy.

Spending cuts in Tuesday’s budget will fund programs to double tourism, increase mining projects and attract foreign business investors.

The Premier will also set out plans to kick-start the housing market through increased land release in Sydney – an extra 10,000 blocks a year – and give a written pledge to maintain the state’s AAA credit rating.

The government’s targets, which it describes as ”deliberately ambitious”, are contained in a new state plan, NSW 2021, leaked to The Sun-Herald. The 63-page plan is being referred to by Coalition staff as ”the bible”.

Insiders said every Coalition budget in coming years would be framed around meeting the targets in the plan and Mr O’Farrell would urge voters to judge his government on clearing the hurdles it sets out.

A cabinet committee, headed by the Premier and his deputy, Andrew Stoner, will be set up to grill ministers and department heads on their targets.

”The 32 priorities in the plan should be on every minister’s pinboard and a copy of the plan in every briefcase. This is what we will be judged on in 2015,” a source said.

The Premier, who has been criticised for launching dozens of audits and investigations since taking office in March, will face some scepticism from an electorate tired of NSW Labor’s ”plans for a plan” style during its years in office.

The Coalition’s plan, which was compiled by one of the Premier’s closest confidants, Peta Seaton, a former Liberal MP, will be subject to an annual progress report scrutinised by the NSW Auditor-General, the Bureau of Statistics and the Chief Scientist.

The plan sets a jobs growth target of 1.25 per cent a year. Based on Treasury figures, that would add 475,000 jobs by 2020 – or about 50,000 jobs a year.

The CommSec chief economist, Craig James, said the government faced an ageing workforce and an uncertain global economy, but with long-term jobs growth averaging 60,000 a year, its target was ”reasonable”.

Mr James welcomed the focus on kick-starting the housing market. The state plan calls for 25,000 new dwellings a year, up from about 16,000. The Housing Industry Association last week warned that NSW would have a shortfall of 155,700 dwellings by 2020.

”The NSW economy … needs a kick-start and housing provides a much-needed multiplier effect. In Victoria they have built more homes, which has attracted more people and created more work for anyone from trades people to someone making curtains,” Mr James said.

The AMP chief economist, Shane Oliver, said increasing business investment by 4 per cent would be a ”challenge”, with current growth close to 3 per cent. Mr Stoner’s department of Trade and Investment will ”target and attract potential international investors into priority sectors, especially where we have overseas NSW trade and investment, tourism or education offices”, the plan states.

If the government meets its target, real business investment will climb from $50 billion a year to $77 billion by 2020.

Mr Stoner will meet the President of the European Commission, Jose Manuel Barroso, in Sydney today to discuss deepening trade ties.

A controversial element of the plan is expected to be its focus on expanding exploration for petroleum and minerals. Under the New Frontiers Program, the government will seek greater investment from mining companies to dig into ”under-explored areas of NSW”.

Tourist expenditure would double over the period, with regional tourism organisations granted $5 million in special funding to promote their areas.

Promises set in stone:

  • 475,000 new jobs over 10 years
  • $27 billion rise in business investment over 10 years (4% a year)
  • $10 billion lift in gross state product (1.5% a year)
  • Double tourism expenditure in 10 years
  • 25,000 new houses built every year
  • 50,000 housing lots to be kept available
  • 10% cut in crimes against people and 15% fall in property crimes by 2015-16
  • 21% cut in childhood obesity by 2015
  • 3% cut in smoking rates by 2015

Source: SMH 4/09/11

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NSW First Home Buyer Stamp Duty Changes

Posted by Mark Mendel in Sydney Property News on 09 8th, 2011

New changes have been made to the stamp duty concessions once again. This time around it has affected First Home Buyers looking to buy established property. From the 1st January 2012, First Home Buyers will not be eligible for any discount on their stamp duty if they are to purchase an established home. If they are looking to purchase a new home or off the plan property, then the stamp duty concessions will still apply.

Many argue that it is very difficult for first home buyers to get into the market and disagree with the government’s move to abolish the concession on old homes but this has been done to help stimulate the economy and requirement for new homes to be supplied to a market that is in desperate need for them.

From January 1 next year, newcomers to the property market will no longer be able to avoid having to pay transfer title charges on existing homes under $600,000. This will affect about 80 per cent of first-home buyers or 42,000 of the 50,000 first home buyers each year on average.

“This reform will make housing more affordable for first-home buyers by boosting the new housing supply,” said Aaron Gadiel from the Urban Taskforce, a large developers’ lobby

The Property Council of Australia said tying stamp duty concessions to new housing supply was “a smart choice”.

“Housing supply remains limp across NSW and gearing incentives to motivate the construction of new stock makes sense,” executive director Glenn Byres said.

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NSW home shortage worsens

Posted by Mark Mendel in Sydney Property News on 01 24th, 2011

NSW experienced a chronic shortage of rental homes in 2010, according to new figures, leading to calls for measures to stimulate private investment in new home building.

Figures released by the Real Estate Institute of NSW found Sydney’s vacancy rate increased by 0.1 percentage points to 1.4 per cent in December.

Vacancy rates fell 0.3 percentage points in Wollongong to 1.3 per cent and by 0.1 percentage points to 1.7 per cent in Newcastle.

REINSW president Wayne Stewart said teachers, nurses, fire officers and police would struggle to find homes near where they worked.

“Unless we see the introduction of major policy initiatives aimed at encouraging greater investment in the private rental market, 2011 will unfortunately show no improvement in the serious shortage of rental accommodation,” Mr Stewart said.

Source: AFR, Friday 21st Jan 2011 (Ben Hurley)

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Demand for Off the Plan Property

Posted by Mark Mendel in Sydney Property News on 09 29th, 2010

Demand for off the plan apartments in Sydney has increased dramatically with the incentives provided by the state government around the stamp duty savings.

These bonuses are labelled the “NSW Home Builder Bonus”. Some of the bonuses include:

100% Stamp Duty saving for anyone looking to purchase an off the plan property before construction has started with a purchase price under $600,000. This could be a saving of $22,490.

For First home buyers, the incentives are even higher with the government not only reducing the stamp duty but also kicking in the First Home Buyer Grant of $7,000 which means a total incentive of $29,490. For First Home Buyers that are looking to buy off the plan, this also gives them some time to save additional funds to put towards their deposit when it comes to settlement on the new property. These can be a new apartments, house and land packages or townhouses.

For those that are looking to buy a little sooner, they can take advantage of a 25% discount on stamp duty for those properties priced under $600,000 where building has already started or even when it is newly completed.

Now although the NSW State Government has been applauded by many for providing this incentive, they still haven’t been able to fix the two other major problems that are stoping new development from being developed. These two items that are still effecting new development include 1) Difficulty in attaining construction finance for developers and 2) local councils and state government not approving these new developments fast enough.

In August 2010 new home sales fell by 2.6% and are 20.5% lower than what they were 12 months ago according to Housing Industry Association. This clearly shows why there isn’t enough supply in the market and why many believe that house prices in Sydney and throughout NSW are likely to keep climbing until the supply side of the equation can be solved.

Another factor that is surely playing on some NSW home buyers minds is the possible increase in interest rates over the next 2 years. Some have already forecast 5 interest rate rises by the end of 2011. It is something the RBA is monitoring carefully and really does reflect a healthy economy every time interest rates move up, however NSW home buyers, especially those that look to purchase off the plan today, need to factor in these possible interest rate rises to ensure that they can still afford the property when it comes to settlement.

For NSW Home Buyers looking to purchase off the plan properties, you can visit Find Investment Property which showcases the latest new apartments for sale.

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Sydney Property Outlook – “Experts think different”

Posted by Mark Mendel in Sydney Property News on 08 30th, 2010

With spring just around the corner, the property market in NSW is normally set for an upswing. This however may not be the case this year as experts across the state and the country are divided about what the warmer weather may bring. The Sydney Property Outlook remains undetermined.

A spokesperson from Mortgage Choice has suggested property investors have been holding back until the strong spring season begins and more properties are launched onto the market, suggesting a strong Sydney property outlook for the rest of the year.

Others think a more subdued property market over the next few months in NSW and Sydney, due to the strong Growth in Sydney and NSW earlier on in the year.

While a more subdued property outlook on the Sydney market may be applicable for the established property market, there are few signs that the off the plan property market in Sydney and NSW are slowing down, especially with the NSW Governments Stamp Duty benefits currently available for those off the plan properties under $600,000.

The Sydney market may have relatively low capital growth over the next 6 months which could be related to the uncertainty around the global economy, interest rates and Australia’s Leadership in Government, however don’t expect property investors to slow down buying a new investment property.

One thing for sure, which everyone in the media seems to forget, is that investing in property is for the long term. To buy investment property based on short term changes in the Sydney property outlook is not the best way to research and buy property. Look for suburbs with infrastructure growth, low supply, increasing population and most importantly a location where rental growth and capital gains are likely to be achieved over the long term.

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NSW Off the Plan – Questions and Answers

Posted by Mark Mendel in Sydney Property News on 07 2nd, 2010

What agreements or transfers are eligible?

The following types of agreement or transfer are eligible for consideration under the scheme:

  • a) A new home purchase. That is an agreement for the sale or transfer of land that is the site of a new home that is complete and ready for occupation.
  • b) An off the plan purchase. That is an agreement for the sale or transfer of land intended to be used as the site of a new home, which is to be built before completion of the agreement.
  • c) A vacant land purchase. That is an agreement for the sale or transfer of vacant land that is intended to be used as the site of a new home and which is not an off the plan purchase.

When does it apply?

It applies to eligible agreements for sale or transfer entered into on or after 1 July 2010 and before 1 July 2012 (other than transfers relating to agreements entered into prior to 1 July 2010).

Are there value limits?

Yes.

  • a) $600 000 in the case of a new home purchase or an off the plan purchase, or
  • b) $400 000 in the case of a vacant land purchase.

What is a new home?

A new home is a home that has not been previously occupied or sold as a place of residence, and includes a home that is a substantially renovated home.

What is a substantially renovated home?

A substantially renovated home is a renovated home:

  • a) that is new residential premises within the meaning of section 40-75(1)(b) of the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth, and
  • b) that, as renovated, has not been previously occupied or sold as a place of residence.

Under that legislation, `substantial renovations’ of a building are defined as renovations in which all, or substantially all, of a building is removed or replaced. The renovations may, but need not, involve the removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases.

Must the purchasers be natural persons?

No, the purchaser can be any entity, including natural persons, a company, or trustee of a trust.

Is there any residency requirement?

No, there is no requirement for the purchaser to live in the home.

For a vacant land purchase when must I commence building the home?

The laying of foundations for the home must commence within 26 weeks of completion (settlement) of the agreement for sale or transfer, or within any longer period allowed by the Chief Commissioner.

There is no time limit on how long it takes to complete building the home.

What is a home?

A home is a building (affixed to land) that:

  • a) may lawfully used as a place of residence, and
  • b) is, in the Chief Commissioner’s opinion, a suitable building for use as a place of residence.

A building suitable for a place of residence includes a house, a unit or flat, a townhouse, a villa home, or any other type of self-contained dwelling affixed to land, (including a manufactured home as defined in the Local Government Act 1993) where evidence can be provided that the local Council is satisfied that the dwelling can be occupied as a place of residence.

A building is not suitable for occupation as a place of residence, for example, if the building is a shed or a factory.

When must applications be made?

Applications must be made within three months of the date of the agreement for sale (or transfer where there is no preceding agreement). This includes off the plan purchases.

The Chief Commissioner may accept an application after expiry of the three month period if satisfied that the delay in making an application was caused by circumstances beyond the control of the applicant or applicants.

Is there an application form?

Yes the relevant application form will be on the OSR website prior to 1 July 2010.

What duty is payable?

For an off the plan purchase where construction of the home has not commenced as at the date of the agreement for sale, and for a vacant land purchase (being land valued up to $400 000 on which a home will be built), no duty is payable.

For a completed new home purchase or an off the plan purchase where construction has commenced as at the date of the agreement, the amount of duty payable is reduced by 25 per cent.

When must duty be paid?

For a new home purchase, within three months of the date of the agreement for sale.

For an off the plan purchase where construction has commenced, within three months of either:

  • a) completion of the agreement;
  • b) when the purchaser assigns their interest in the agreement; or
  • c) 12 months from the date of the agreement,

whichever occurs first.

When does construction of a new home commence?

Construction of a new home commences at the time when the laying of the foundations of the new home, or of the building in which it is located begins.

When does construction for a ‘staged development’ commence?

When construction of the first residential level of the building in which the new home is located begins.

A staged development comprises two or more multi-storey buildings that have common foundations and which are to be constructed in separate stages.

When does construction of a substantially renovated home commence?

For an off the plan purchase of a substantially renovated home, construction commences when construction of new or replacement parts of the home, or the building in which it is located, begins. Demolition work does not count as construction work. This would be applicable for example, where you are buying premises (such as a warehouse or factory unit), and under the terms of the agreement it will be a new home on completion.

Does the scheme apply to replacement agreements?

An agreement for the sale or transfer is not eligible if:

  • a) it replaces an agreement made before 1 July 2010, and
  • b) the replaced agreement was an agreement for the sale or transfer of substantially the same property.

However an exemption applies to an off the plan agreement that replaces an earlier off the plan agreement if the earlier agreement is exempt, and the replacement agreement is for the same property and the purchasers are the same. This applies whether or not construction has commenced as at the date of the replacement agreement.

Must the land be zoned residential?

No, there is no requirement that the land is zoned residential.

Can the home or land be used for other purposes?

An agreement or transfer is not eligible if the new home, or the land on which the new home is located or to be built, is intended to be used for any purpose other than residential (such as commercial, industrial or professional). However, an agreement for the purchase of a farming property on which there is a new home or on which a new home is to be constructed is eligible for consideration.

Must the agreement be for the whole of the land?

The agreement or transfer must be for the whole of the land or, if the land is a parcel of land on which two or more homes are built, or are being built (such as a duplex), for one of those homes.

Can I get the exemption or concession more than once?

Yes.

Can the applicant also apply for First Home Plus?

The applicant can apply under this scheme or the First Home Plus Scheme (but not both).

Can the applicant also apply for the First Home Owner Grant?

Yes, eligible applicants can apply for the Grant.

What if my contract is aggregated with another contract?

The 25 per cent reduction is to be applied only to the duty that would be chargeable on the eligible agreement or transfer.

Can I get the exemption or concession if I’m purchasing an existing home to knock down and build a new home on the land?

No, the agreement must be for the purchase of vacant land on which you are going to build a home, or a purchase of a completed new home or a new home off the plan.

Can the agreements or transfers be stamped on EDR?

An off the plan purchase where construction has commenced as at the date of the agreement, can not be stamped on EDR. These will need to be lodged with OSR.

All other transactions under the scheme can be stamped on EDR. The relevant application form must be completed and the transaction processed within three months of the date of the agreement for sale. An EDR process bulletin will be issued shortly.

For an off the plan purchase where construction has commenced, what do I need to lodge at OSR?

The relevant agreement for sale and application form must be lodged within three months of the date of the agreement. The agreement will be retained by OSR until the duty is paid.

Can an application be approved in advance?

Yes, the Chief Commissioner may approve an application in relation to any agreement or transfer in advance of the requirements of the scheme being met, provided the necessary application form and evidence is produced.

Source: NSW Office of State Revenue 2.07.10

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NSW Stamp Duty Abolished… for some

Posted by Mark Mendel in Sydney Property News on 06 10th, 2010

Property Investors and Home Buyers have welcomed the move by the NSW State Government to remove the payment of Stamp Duty for those that purchase off the plan before construction begins and discount it when construction has started. This is applicable for all purchasers under $600,000.

Once again it is the lower price market that gets the assistance which will continue to help push prices higher for everyone. It is a good move by the NSW Government and one that many should take advantage of. The intention is for developers to start bringing to market affordable property priced under $600,000. Although developers and now the Government have every intention of helping property buyers, the developments are still being delayed by Councils who are not approving plans and banks who are still reluctant to finance unless the developer is financially very strong with a large number of pre-sales for the particular project. Now with the removal of the NSW Stamp Duty for some properties, hopefully the achievement of these pre-sales will be a little bit easier.

Some have said that although this move by the NSW Government to abolish Stamp Duty on new homes and apartments is a move in the right direction, it is still not enough. These days $600,000 doesn’t buy you much depending on the suburb and location you are looking at and in many cases developers just can’t deliver a quality product due to their land prices being so high.

What about those that are shopping in the $600,000 – $750,000 price bracket. There really should be a phasing out up to $750,000 which is where the upper limit is for first home buyer concessions. If you spend $601,000 then you are required to pay full stamp duty, but at $599,999 then you save yourself circa $22,000. There really does need to be a scaled approach to this effort by the Government.

While we are all waiting for the Government and the OSR to release official information we will just have to sit back and wait to see what the finer details are.

This is a very positive move for NSW and should help stimulate much needed residential development across the state and hopefully with a focus on some of the growth corridors where heavy infrastructure spending is required to deliver community needs including new transport, hospitals and other amenities.

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NSW Property Buyers get hit for extra Transfer Tax

Posted by Mark Mendel in Sydney Property News on 05 21st, 2010

The NSW State Government has announced that a new transfer fee will be introduced on the transfer of properties valued over $500,000. In his media release the Minister for Lands, Tony Kelly, advised that the fee will be introduced to “strengthen the equity of NSW property transactions and improve the security of the Torrens Title system”, although it is unclear as to how the fee will achieve these aims.

The new Trasnfer Fee Tax will be charged from 1 July 2010 as follows:

$0 to $500,000 – $190

$500,000 to $1 million – $190 +0.2% of the value of the property over $500,000

over $1 million – $1,190 plus 0.25% of the value of the property over $1 million

$1,190 plus 0.25% of the value of the property over $1 million

The new transfer fee is said to commence as of 1 July 2010. It is also unclear as to whether any time limit will be imposed on payment, as it is with stamp duty, and also as to which government agency will be responsible for collecting the fee. The Land and Property Management Authority (LPMA) is responsible for the title registration system in NSW and currently charges a fixed fee of $190 on all transfers, irrespective of value. However, the Office of State Revenue (OSR) is responsible in NSW for the collection of stamp duty on the transfer of dutiable property and has policies to deal with matters such as late payment and determining the value of property for stamping purposes.

The effect of the new transfer fee on the purchase of the average residential property is arguably not great. On a purchase price of $750,000, the new transfer fee payable will be $500 and on a purchase price of $1.5 million, the fee is $2,250.

However, on higher valued properties the new transfer fee may be significant. An additional $23,500 will be payable on a price of $10 million. On a price of $200 million, a transfer fee of almost $500,000 will be payable, an increase of over 4.5% on the current stamp duty collected on a transaction of this size.

(Source: Holding Redlich Lawyers)

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