As part of its efforts to boost the housing industry and the economy, the state government of New South Wales decided to temporarily increase the price cap of newly constructed homes that will be exempt from stamp duty.

Under the changes, first-home buyers will not be required to pay any stamp duty for newly-built homes worth up to $800,000. This translates to a saving of up to $31,335.

The stamp duty for homes up to $1m was lowered — a new home with a value of $900,000 will only be charged a $20,168 stamp duty, down from $35,835.

Vacant land with values of up to $400,000 will also now be exempt from stamp duty, a potential savings of up to $7,793.

Also read: Who benefits from axing stamp duty?

The changes in stamp duty threshold will commence next month and will last for a year.

NSW Premier Gladys Berejiklian said the change to stamp duty thresholds would also support new-home construction and create jobs as part of the government's COVID-19 Recovery Plan.

"Thousands of people will see their bank balances benefit from this change — it will help get more keys into more front doors of more new homes," she said.

NSW Treasurer Dominic Perrottet said the current stamp duty concession has already helped 93,000 first-home buyers since July 2017, and the changes will further help the industry, especially amid the COVID-19 outbreak.

"We need to ensure our building sites keep ringing with hammers and saws, as that means more people working, and first-home owners will save money in the process," Perrottet said.

David Bare, executive director for NSW at HIA, said this announcement and the other housing support programs by the state and federal governments are critical in supporting the home-building industry.

"The home-building industry will play a critical part of NSW's economic recovery from COVID-19-related challenges, and the NSW government should be applauded for listening to our calls for greater support," he said. "This package will ensure that there is plenty of suitably priced new homes for first-home buyers to take advantage of right across the state."