Stamp duty concession puts pressure on prices

21/06/2010

The NSW government's decision to remove stamp duty for off-the-plan property under $600,000 could push up prices. To obtain the full $22,490 saving offered in the budget, buyers must sign up before building commences. If construction has already begun, they are eligible for a $5623 discount. And to be eligible, the building must be completed within two years of a buyer exchanging on the deal.

The chief economist with St George Bank, Justin Smirk, said ''it's certainly going to create more demand'' he said. ''But the problem is it takes a long time for the credit approvals to get through the [banking] system''.

David Milton, the managing director of agents CB Richard Ellis said the plan was ill-conceived because most large developments would not comply and the two-year time frame would be too tight. ''A lot of our projects have 20-month to two-year building periods,'' Mr Milton said. ''And if there are wet-weather delays or if there are issues with your builder, it's not going to work out''.

Source: Sydney Morning Herald