The NSW Government is abolishing stamp duty for homes purchased off-the-plan.

Sydney-based property consultant Greg Preston, director of Preston Rowe Paterson, said abolishing stamp duty should result in reigniting the dormant residential development market.

“The lack of supply and strong demand for housing will be the catalyst for reviving housing construction,” Mr Preston said adding that there will be significant benefits for the New South Wales economy.

For two years from July 1, stamp duty will be eliminated for off-the-plan purchases of new homes valued at less than $600,000, a saving of up to $22,490.

For other buyers of new homes already under construction or newly completed and worth up to $600,000, there will be a stamp duty cut of 25%. This equates to a saving of up to $5,623.

Those buying a vacant block of land would pay no stamp duty, while first-home buyers would receive $29,490 in benefits if they purchased off-the-plan in the pre-construction stage.

Stamp duty will also be eliminated for the next two years for over-65s who sell their home to move into a newly built dwelling worth up to $600,000.

New South Wales Treasurer, Eric Roozendaal, says “project financing can be a hurdle to new home construction, especially for apartments, so by helping people to buy off-the-plan and to buy early, we are giving builders a better chance of securing project finance.”

Sydney apartment pre-sales are expected to increase as a result of the stamp duty concessions. The initiative could also help alleviate the shortage of housing in Sydney and will provide a boost to the housing construction industry.