NSW Stamp Duty Changes for First Home Buyers
First Home Buyers in NSW will have the choice between an upfront stamp duty payment or a smaller annual property tax.
Under the First Home Buyer Choice Bill from 16 January 2023 those purchasing a home up to the value of $1,500,000 can elect either option.
This initiative aims to lower the up-front costs of home purchases and help to boost the rate of home ownership in NSW. The annual property tax will only be payable by first home buyers who choose it, and will not apply to subsequent purchasers of a property.
Existing stamp duty concessions for first home buyers are available for purchases of up to $800,000, and these concessions will continue. Although the scheme is accessible for eligible first home buyers from November 12, buyers will be required to pay stamp duty on purchases made until January 15, 2023. If they choose to opt into the annual fee, they can apply for a refund of the stamp duty cost.
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 OR 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.
The annual property tax payments will be based on the land value of the purchased property. The property tax rates for 2022-23 and 2023-24 will be:
$400 plus 0.3 per cent of land value for properties whose owners live in them
$1,500 plus 1.1 per cent of land value for investment properties.
These tax rates will be indexed each year from 2024-25, so that the average indexed property tax payment rises in line with average annual incomes. In addition, the year-to-year growth of individual property tax payments are capped at a maximum of 4 per cent.
Property tax assessments will be issued in respect of financial years. For properties that are owned for less than a full financial year, a pro rata adjustment will be made based on the number of days in the year the property is owned.
To calculate your property tax click here:
To find out more speak with our finance or legal teams.