Historic First Home Buyer Law Passes in Parliament

First Home Buyer Choice

First home buyers in NSW now have the choice between paying an annual property tax or stamp duty.

First home buyers will be available to access the scheme from 12 November, however, these buyers will be required to pay stamp duty on purchases made until 15 January 2023. From that point, they will be able to apply for a refund of their stamp duty should they opt into the scheme.

From 16 January 2023, eligible buyers can opt directly into the annual fee without being required to fork out stamp duty.

Existing stamp duty concessions for first home buyers are available for purchases of up to $800,000, and these concessions will continue.

Eligibility:

  • You must be an individual (not a company or trust)
  • You must be over 18 years old
  • You, or at least 1 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

Choice between stamp duty or a property land tax:

If you are eligible, you can choose between:

  • Paying the usual amount of stamp duty based on the ‘dutiable value’ of your property OR
  • Paying an annual property tax based on the land value of the property

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
  • $1500 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.

Click here to read more.

Posted on Friday, 11 November 2022
in Latest News

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