The NSW Government has announced changes to stamp duty for first home buyers. The First Home Buyer Choice will provide an option for eligible first home buyers purchasing properties with a value of up to $1.5 million to either pay stamp duty or an annual property tax. The aim is to lower the up-front costs that are a barrier for many first home buyers entering the property market. The NSW Government has allocated $729 million over the next four years to implement the scheme and help first home buyers purchase property.
The existing stamp duty concessions already available for first home buyers for properties with a value up to $800,000 will remain in place.
To be eligible you must meet the following criteria:
If you meet the above eligibility criteria, then you have the choice 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 unimproved land value of the property. There is no change to the way in which stamp duty is calculated.
The annual property tax will be calculated based on the land value of the purchased property with the rates for 2022-23 as follows:
If the annual property tax is chosen, then this will only apply to the first home buyer and will not apply to subsequent buyers of the property.
It is proposed that the scheme will commence from 16 January 2023. Eligible home buyers who sign a contract between when the legislation is passed, and 15 January 2023 will be eligible to opt into the property tax. These buyers will be required to pay any applicable stamp duty, but from 16 January will be able to apply for and receive a refund of the stamp duty if they wish to pay the property tax instead.
If you have any further questions regarding these reforms, get in touch with your WDF Professional team member on 02 6921 5444.
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