Calls to lift NSW stamp duty exemption limit
With the NSW Budget for 2025–26 to be announced tomorrow, the government's policy
decisions on housing are already locked in. But whatever is unveiled, one thing is clear: it's
the bank of mum and dad that's already stepping up to support first home buyers.
At Loan Market, we've seen guarantor-backed pre-approvals for first home buyers in NSW
more than double in the past year. Around 11 per cent of these now involve a parent using their home as security, up from just 5 per cent a year ago.
It's a clear signal: more young Australians are leaning on their families, not because they
want to but because they have to.
And the challenge goes well beyond house prices. Since 2020, rent in Sydney has jumped
44 per cent, while groceries have increased by 27 per cent at the checkout and other costs, like car insurance have soared by more than 40 per cent. These are everyday pressures, not luxuries, and they're making it even harder for people to save. At the same time, seasoned investors have returned to the market with confidence.
At Loan Market, we've seen a 31 per cent rise in investor loans year-on-year.
If the government is serious about helping first home buyers, the conversation can't stop at
housing supply. Stamp duty is one of the biggest upfront costs they face and it's stopping
many from even getting close.
Right now, full stamp duty exemptions only apply to properties under $800,000, with partial
concessions up to $1 million. That might have worked once, but those numbers don't reflect
today's reality. Sydney's median house price sits at $1.46 million, according to PropTrack data. Even the median unit price is $820,000, already above the current threshold.
Take a couple trying to buy their first apartment at that median price. If they tip over the
$800,000 limit, they could be hit with nearly $33,000 in stamp duty. That's on top of their
deposit, legal costs, and moving expenses. And if they're hoping to buy a house in Sydney?
The median puts any stamp duty support completely out of reach.
Some suggest buyers should just look further out. But for many with jobs in the city, family
nearby, and deep community ties moving over 40 minutes away simply isn't realistic or fair.
More and more, we're seeing first home buyers invest interstate instead, renting out the
property while building equity. It's a smart move in tough conditions but it's also a sign of a
broken system.
Raising the full exemption threshold to $1.5 million, closer to real-world property prices, would make a genuine difference. Buyers would still need to pass strict lender serviceability
tests, including a 3 per cent buffer. But it would ease one of the biggest barriers they face.
And we can't forget the broader picture. First home buyers keep the market moving. When
they step in, others can upsize, downsize or move where they need. When they're shut out,
it slows everything down.
Of course, not everyone has parents who can help. And even when they do, it often comes
at a cost like delaying retirement, putting travel plans on hold, or shelving downsizing.
That's where great brokers make a real difference. They help structure a pathway to reduce
the debt and remove the guarantor as soon as it's viable. It's not about cutting corners, it's
about smart, sustainable solutions.
There's also a case for stamp duty exemptions or concessions to be given to retirees, as
well. If empty nesters were encouraged to downsize from their large family homes, there
would be more supply in the market for families looking to upsize. Greater supply in the
market provides more choice and sustainability in prices.
Stamp duty reform has been debated for years. The question now is whether tomorrow's
budget will finally shift from talk to action.
This isn't just a policy choice. It's an opportunity to back Australians who are doing
everything right – working hard, saving hard, and leaning on family when there's no other
option. It's time to support the parents who've been carrying the load, and the next
generation trying to find their place in the market.
It's time to turn intent into action. Here's hoping this budget delivers for those working
hardest to get their start or for young Australians to get the same opportunities like others
before them.
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