The NSW Government's decision to limit first home buyers' stamp duty concessions to newly built homes from 1 January 2012 will help boost the supply of new housing, developers say.
The Urban Taskforce chief executive, Aaron Gadiel, said the $1 billion revenue measure was a sensible step.
"This reform will remove the current scheme's inflationary impact on home prices, and will make more housing available to more people," Gadiel said.
Gadiel said that existing first home buyers' stamp duty concessions have been poorly targeted for far too long.
"NSW's housing supply has been heavily constrained by the planning system and high development levies," he said.
"With the costs imposed by the planning system, developers simply cannot build enough new homes at a price that is competitive with the existing stock of housing.
"In our supply constrained home market, the existing first home buyer stamp duty concessions inflate home prices across the board. But this hasn't addressed the high cost of supplying newly built homes to the market.
"By tying stamp duty concessions exclusively to new housing, the inflationary impact on existing housing will be removed, and brand new homes will be more attractive to home buyers.
"This will help make up for the high costs embedded into each new home by the inefficiencies of the planning system and excessive development levies.
"This improves the financial viability of NSW home development and will make it easier to secure capital for new residential projects."
The budget papers say that the better targeting of the First Home Plus and First Home Plus One schemes will raise the government an extra $1.049 billion over four years.
"This money should be set aside to help fund urban infrastructure essential for growth," Gadiel said.
