2022 NSW Budget: What’s in it for you?
The 2022-23 NSW Budget has been handed down and as the final Budget before the State election, it is perhaps no surprise that the government is spending lavishly in a bid to shore up votes. Prominent measures targeting families and first home buyers have been announced. The current Budget deficit for NSW sits around $11.3bn and is projected to decrease to around $2.5bn in 2023-24.
While the NSW Treasurer has an optimistic economic outlook, with the State on track to return to a Budget surplus by the 2024-25 financial year, there remain significant economic and fiscal pressures, such as inflation and interest rate increases, which will increase the State’s cost of borrowing.
Families
The government has announced a new Back to School Program, which is set to provide $150 to every NSW school child to be used towards to the cost of school supplies in 2023, including uniforms, shoes, bags, learning resources, and other stationery.
Other continuing programs for school-aged children include Active Kids, and Creative Kids, which provide vouchers to families to get children involved in physical and creative/cultural activities. Also making a return appearance is the First Lap voucher specifically for swimming and water safety.
For families with pre-school aged children, the government has committed to expand the Affordable Preschool program, which will provide families with $2,000 per child per year for preschool in long day care settings, and up to $4,000 per child per year in community and mobile preschools. The projected cost of this measure will be $1.3bn.
In addition to the fee relief, the government has also committed another $5.8bn in the Budget over 10 years as an investment to make pre-kindergarten available to all children in the year before school by 2030.
First home buyers
The NSW government has committed $780.4m to a 2-year trial of a shared equity scheme for up to 6,000 eligible participants purchase a home. Those eligible include a single parent of child/children under 18 years of age, a single person 50 years of age or above, or first home buyer key workers who are nurses, teachers, or police. The gross income of the household must not be more than $90,000 for singles and $120,000 for couples, and a minimum deposit of 2% is required for purchasers.
Under the scheme, the NSW government will contribute up to 40% of the purchase price of a new dwelling or up to 30% of the purchase price of an existing dwelling. No repayments will be required on the equity contribution and no rent or interest will be charged while the purchaser remains eligible. However, voluntary payments can be made in order to progress to full ownership of the property.
The property price must be less than $950,000 in Sydney and major regional centres such as Newcastle, or less than $600,000 in other regional areas. Those wishing to participate in the scheme should be aware that an annual review is required each year to ensure continued eligibility. Those that no longer meet the eligibility criteria may be required to begin repayment of the government equity contribution, although no details on the form and method of repayment are available at the present time.
Participants are also required to maintain their property and keep things in good working order. In addition, the government must approve certain modifications/renovations so that the value changes can be factored into the eventual sale price of the property.
In addition to the shared equity scheme, the government will also set aside $728.6m in order to introduce an option for first home buyers purchasing a home for up to $1.5m to pay an annual property tax instead of upfront stamp duty. The annual property tax payments will be based on the land value of the purchased property and the proposed rates for 2022-23 will be $400 plus 0.3% of land value for principle places of residence or $1,500 plus 1.1% of land value for investment properties.
Want to find out more?
If you would like to know about how to benefit from the NSW Budget or fully understand other measures relating to infrastructure or business, we have the expertise to go beyond the headlines and explain how these measures will affect you. Contact us today.
