The NSW State government will temporarily cut stamp duty on new homes under $800,000 for first home buyers in a bid to boost construction and create jobs amid the COVID-19 crisis.

Under the changes the threshold above which stamp duty will be charged on new homes for first home buyers will increase from the current $650,000 to $800,000, with the concession reducing on higher values before phasing out at $1 million. 

The government forecasts more than 6000 first home buyers will benefit from the changes, saving eligible first homebuyers thousands of dollars. 

Under the changes the stamp duty threshold on vacant land will rise from $350,000 to $400,000 and will phase out at $500,000. 

The change to the thresholds will only apply to newly-built homes and vacant land, not to existing homes, and will last for a 12-month period, commencing on 1 August 2020. Other purchases will continue to benefit from existing schemes. 

Treasurer Dominic Perrottet said the changes would save first home buyers stamp duty of up to $31,335 on a new $800,000 home. 

The NSW Government will also continue to offer a $10,000 First Home Owner Grant, which is available to people buying a new first home worth no more than $600,000, or buying land and building a new first home worth no more than $750,000 in total. 

This means the maximum amount of benefit a home owner could be entitled to is $32,335 if purchasing a new home and accessing the grant. 

Indicative tax threshold changes: