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NSW First Home Buyers Stamp Duty Relief – FHBC

NSW First Home Buyers Stamp Duty Relief – FHBC
  • Lopez
  • 25/11/2022
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Buying a home is a big financial commitment. Associated costs like stamp duty can quickly add up, making it difficult for first-time home buyers to save.

In a ground-breaking move for the NSW government, first-time home buyers in New South Wales will, from 16 January 2023 given the choice of paying a smaller annual payment (Annual property Tax); the annual rate will be 0.3% of the property’s unimproved land value plus $400 or a large upfront once- off payment (Stamp Duty) on their first property approx. 4%.

The changes are designed to make owning a first home more affordable. The Scheme is called First Home Buyers Choice.

Only first-home buyers can opt-in for the property tax; ALL OTHER purchases must continue to pay stamp duty as usual.

Eligibility Criteria?

To qualify for the First Home Buyer Choice Scheme, you’ll need to meet a few criteria:

  • Must be individual
  • Over the age of 18 years old
  • Purchase property under the value of $1.5m
  • Australian Citizen and Permanent Resident
  • You must move into the property for at least 6 months within the first year of owning
  • You or your Spouse never owned a property in Australia

Eligible first-home buyers who sign a contract of purchase between 11 November 2022 and 15 January 2023 will also be able to opt into the property tax:

  • For this group, applications to choose the property tax can be made anytime between 16 January 2023 and 30 June 2023.
  • If settlement occurs on or before 15 January 2023, they will need to pay stamp duty and then apply for a refund of the stamp duty after 16 January.
  • If settlement occurs on or after 16 January 2023, and they have chosen property tax, they will not need to pay stamp duty.
  • Purchasing under the value of $650,000 can consider using the First Home Buyers Assistance Scheme NSW for $0.

If the property Becomes an Investment?

If you have chosen to participate in the First Home Buyer Choice scheme and later convert your primary residence into an investment property, you will be subject to different rates.

The percentage of the unimproved land value will increase from 0.3% to 1.1%, plus you will be required to pay $1,500.

[Unimproved Land Value x 1.1%] +1,500 = Annual Property Tax payable

E.g., Unimproved Land Value [$400,000 x 1.1%] +1,500 = $5,900

Are you ready to purchase your first home? Get in touch!

NSW First Home Buyers can get into the property market using this new scheme paying an annual property tax instead of spending thousands of dollars on stamp duty upfront.

If you have any questions about purchasing your first home, need finance or would like to organise an appointment to discuss. Get in touch with the Surestart team today.