First Home Buyer Choice
The NSW Government has introduced changes to the NSW property tax system giving first home buyers purchasing a property for up to $1.5 million a choice between paying an annual property tax or stamp duty. The government states that these changes will lower the up-front costs of a home purchase.
Eligibility
To be eligible to opt in to the annual property tax:
1. You must be an individual
2. You must be over 18 years old
3. You, or at least one person you’re buying with, must be an Australian citizen or permanent resident
4. You must not have previously owned or co-owned residential property in Australia or received a First Home Buyer Grant or duty concessions
5. The property you are buying must be worth less than or equal to $1.5 million
6. You must move into the property within 12 months of purchase and live in it continuously for at least 6 months
7. You must sign the contract of purchase on or after November 11, 2022
Commencement
Eligible first home buyers who sign a contract of purchase from 16 January 2023 onwards can opt into the property tax directly and will not be required to pay stamp duty.
Eligible first home buyers who sign a contract of purchase between 11 November 2022 and 15 January 2023 will be able to opt into the property tax. Applications must be submitted between 16 January 2023 and 30 June 2023. If settlement occurs on or after 16 January 2023, applicants will not need to pay stamp duty. However, if settlement occurs prior to 16 January 2023, applicants will need to pay stamp duty and apply for a refund of this stamp duty after 16 January 2023.
Choosing Between Stamp Duty and Property Tax
No changes are being made to the first home buyer stamp duty exemptions and concessions. If the first home buyer is not eligible for a concession and does not opt in to property tax, the normal rates of stamp duty will apply.
The annual property tax payments will be based on the value of the land purchased. The tax rates will be indexed each year and property tax assessments will be issued in respect of financial years.
Visit the NSW Government website to use the First Home buyer Choice Calculator to compare your estimated property tax and stamp duty.
Eligibility
To be eligible to opt in to the annual property tax:
1. You must be an individual
2. You must be over 18 years old
3. You, or at least one person you’re buying with, must be an Australian citizen or permanent resident
4. You must not have previously owned or co-owned residential property in Australia or received a First Home Buyer Grant or duty concessions
5. The property you are buying must be worth less than or equal to $1.5 million
6. You must move into the property within 12 months of purchase and live in it continuously for at least 6 months
7. You must sign the contract of purchase on or after November 11, 2022
Commencement
Eligible first home buyers who sign a contract of purchase from 16 January 2023 onwards can opt into the property tax directly and will not be required to pay stamp duty.
Eligible first home buyers who sign a contract of purchase between 11 November 2022 and 15 January 2023 will be able to opt into the property tax. Applications must be submitted between 16 January 2023 and 30 June 2023. If settlement occurs on or after 16 January 2023, applicants will not need to pay stamp duty. However, if settlement occurs prior to 16 January 2023, applicants will need to pay stamp duty and apply for a refund of this stamp duty after 16 January 2023.
Choosing Between Stamp Duty and Property Tax
No changes are being made to the first home buyer stamp duty exemptions and concessions. If the first home buyer is not eligible for a concession and does not opt in to property tax, the normal rates of stamp duty will apply.
The annual property tax payments will be based on the value of the land purchased. The tax rates will be indexed each year and property tax assessments will be issued in respect of financial years.
Visit the NSW Government website to use the First Home buyer Choice Calculator to compare your estimated property tax and stamp duty. 