The NSW Labor Government has revoked the previous administration’s property tax alternative to stamp duty, the First Home Buyer Choice (FHBC) scheme, and announced an expanded concession system for first home buyers.
The NSW Government will introduce legislation into NSW Parliament this week to create its more straightforward, fairer stamp duty concession scheme, ensuring that 84% or 5 out of every six future first-home buyers will pay no tax or a reduced rate, starting Saturday, 1 July 2023.
The threshold for stamp duty exemptions for first-home buyers will be lifted from $650,000 to $800,000, and stamp duty concessions from $800,000 to $1 million.
That means a first-home buyer purchasing a property at $800,000 will save up to $31,090 under the changes.
Premier Chris Minns said he realized the stress associated with purchasing a first home and the struggle that came with it.
“This is a fairer and simpler system to ensure more first home buyers have a chance of owning their first property,” he said.
However, the benefits will be costed on a sliding scale depending on the cost of the home.
For example, a first-home buyer must pay a stamp duty of $10,023 (saving $23,318 on existing rates) on a property worth $850,000. However, a home worth $990,000 will incur $38,086 in stamp duty fees, significantly reducing the savings to $1555.
Buyers will also be required to live at their chosen property for 12 months instead of six, which the government hopes will improve the integrity of the benefits.
The legislation will include grandfathering provisions so first-home buyers who opted into the annual property tax can continue to pay that tax until they sell their property.
If you want to discuss financial planning for property investment, our specialist team will gladly help.