The NSW Government has introduced the First Home Buyer Choice Scheme. The First Home Buyers Choice allows First Home Buyers the choice of how they pay their stamp duty. You can either:
- Pay stamp duty up front at settlement; or
- Elect to pay an annual property tax for the lifetime that you own the property.
The choice of the new annual property tax is available to first home buyers on purchases of residences (new or existing homes) for prices up to and including $1,500,000.00 or purchases of vacant land on which you intend to build a home, for prices up to and including $800,000.00.
The scheme was passed by NSW Government on 11 November 2022 and comes into effect officially on the 16 January 2023, however you may be able to change the choice you made if you exchange contracts any time after 11 November 2022 and settle in between these dates (11 November 2022-15 January 2023) and have paid stamp duty in full. You can still apply to pay annual property tax option, with the stamp duty that you paid being refunded.
This scheme is offered to both owner occupiers (principal place of residence) & investment properties for First Homeowners. To be considered an owner occupier you must move into the new home within 12 months after buying the property and live there for at least 6 continuous months. If you live in the property for less than 6 months, the property tax will be re-assessed for the relevant period. If the purchase is an investment property, then the rate of tax is higher.
The property taxes for 2022-2023 and 2023 -2024 will be $400.00 + 0.3 per cent of land value for properties whose owner live in them (principal place of residence) or $1,500.00 plus 1.1 per cent of land value for investment properties, these tax rates may be subject to change after these dates. Land value is determined by the Valuer General.
If you know the property address you are purchasing – Service NSW also offers a calculator which can help you calculate the annual land property tax v paying stamp duty up front – the link is First Home Buyer Choice Calculator (nsw.gov.au)
For more information on any of the First Homeowners Schemes please contact the friendly Conveyancing Team at Watkins Tapsell.