The NSW Government has thrown out a challenge to other states with its Budget 2010 announcement this week that people who purchase a new home `off-the-plan' before the start of construction will pay no stamp duty.
Under the $140 million property construction initiative, NSW families and investors can save up $22,490 under the new Home Builder's Bonus program - and first home buyers will receive benefits of up to $29,490.
Treasure Eric Roozendaal said the off-the-plan initiative is open to anybody purchasing a new house or apartment, including investors, and is designed to boost the state's property and housing construction sectors.
The NSW Home Builder's Bonus will run for two years from July 1, 2010.
The NSW housing sector is worth about $17 billion a year and makes up almost 5 per cent of the state's economy.
Construction in the state's private housing sector has increased 3.2 per cent since the March quarter of 2009, as the industry recovers from the global financial crisis.
"Developer financing has been identified as a major roadblock to boosting the rate of new home construction, especially for apartment developments. Mr Roozendaal said.
"In encouraging people to buy off-the-plan and to buy early, builders will have a better chance of securing finance from banks and other financial institutions."
Mr Roozendaal said the success of the Housing Construction Acceleration Plan announced in last year's Budget had sparked the creation of the NSW Home Builder's Bonus.
"Dwellings worth more than $1.6 billion have been sold so far under HCAP, which changed the housing construction sector in NSW," Mr Roozendaal said.
"Around 3700 applicants, including investors, have taken advantage of the 50 per cent stamp duty cut under HCAP, putting around $28 million worth of stamp duty back into their pockets". (As at May 30).
"More importantly, it stimulated construction activity, supporting jobs for builders, plumbers, landscapers, carpenters and more.
"The Home Builder's Bonus is more than a worthy successor which will deliver further investment in the NSW housing construction sector."