It has been tough for first home buyers to secure a property in NSW in the last few years with property prices sky-rocketing and being unaffordable. The First Home Buyer Choice scheme is designed to lower the upfront costs of purchasing a home to increase the rate of home ownership in NSW for First Home Buyers. Stamp duty is a hefty sum for first-home buyers.
Fortunately, NSW Government has now announced changes to the property tax system to allow first-home buyers to choose between paying stamp duty or a smaller annual property tax. The New Scheme called First Home Buyer Choice commencement date is the 16th of January, 2023. However, the legislation was passed on the 10th of November 2022, allowing those purchasing a house from 12 November 2022 to 15 January 2023 to opt for the annual property tax. They will still be asked to pay stamp duty, but they can apply for a refund.
According to the 2022-2023 state budget, the New South Wales Treasurer has announced the following in relation to property and tax -
For first-home buyers who are purchasing a property up to $1.5 million will have the choice of either paying stamp duty or an annual property tax. This aims to incentivise a reduction in the up-front costs for first-home buyers in an effort to boost the rate of home ownership in NSW. As a result of the rising home prices, it has been extremely difficult for new, young or low-income groups to penetrate the market with a drop of 6% in ownership since the 1990’s.
The idea behind this is that removing the obligation to pay stamp duty will lower the up-front cost and cut upwards of two years of time worth of saving towards buying a first-home. Additionally, stamp duty concessions for first-home buyers are available for purchases of up to $800,000 and will continue for the foreseeable future.
To be eligible:
- you must be an individual (not a company or trust)
- you must be over 18 years old
- you, or at least one person you’re buying with, must be an Australian citizen or permanent resident
- you or your spouse must not have previously:
- owned or co-owned residential property in Australia
- received a First Home Buyer Grant or duty concessions.
- the property you are buying must be worth less than or equal to $1.5 million
- you must move into the property within 12 months of purchase and live in it continuously for at least 6 months
- you must sign the contract of purchase on or after 11 November 2022
Further information is available on - https://www.service.nsw.gov.au/transaction/calculate-your-property-tax
Information on how to apply for the property tax is available on Revenue NSW website OR you can discuss the same with us by calling us on 02 6989 4656.