The NSW Government has announced that first home buyers purchasing properties for up to $1.5 million will be able to choose to pay an annual property tax instead of stamp duty.
Eligible first home buyers who sign a contract of purchase on or after 16 January 2023 will be eligible to opt into the property tax and will not be required to pay stamp duty in order to complete their transaction. Existing stamp duty concessions for first home buyers are available for purchases of up to $800,000, and these concessions will continue. The property tax option will be available for properties for up to $1.5 million, with the NSW Government stating that the scheme will help a broader group to become first home buyers. Legislation passed through NSW Parliament yesterday to enable the commencement of the First Home Buyer Choice scheme.
Who is eligible?
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
- 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 the scheme commencement date.
While you may buy the property with a person who is not an Australian citizen or permanent resident, surcharge purchaser duty may still apply and it is important to seek timely advice, prior to entering into a Contract for Sale.
When does it commence?
Eligible first home buyers who sign a contract of purchase between the passage of the legislation and 15 January 2023 will be eligible to opt into the property tax. However, these purchasers will be required to pay any applicable stamp duty within the usual required periods and from 16 January 2023, will be able to apply for and receive a refund of that duty.
Got questions? Give us a call to make an appointment to discuss the purchase of your first home.
What happens when I sell the property?
Only first home buyers are eligible to pay the property tax. All other purchasers must continue to pay stamp duty as normal. If you are buying a property from somebody who is paying the property tax, you will not be subject to the property tax (unless you are also an eligible first home buyer and you choose to pay the property tax).
