Buying your first home can be a daunting process with so many factors to take into consideration. Stamp Duty is one of these considerations which, if not handled properly can pose a significant obstacle to achieving your home ownership dream.
Fortunately, the NSW government has introduced a recent initiative that aims at simplifying and providing greater options under the new First Home Buyer Choice scheme.
Here at Vogue Homes, we’re committed to helping our customers navigate their first home-building journey. We’ve put together this blog to go through the details of changes in NSW Stamp Duty Reforms, so our customers are fully informed and can make the right decision under their applicable circumstances.
What Are the Details of the First Home Buyer Choice?
The NSW Government has announced changes to the property tax system, that aim to lower the up-front costs of home purchases and help to boost the rate of home ownership in NSW.
Under this reform, first-home buyers will be given the choice between paying an annual property tax or stamp duty. This choice will be applicable for properties valued up to $1.5 million, and property tax will only be payable by first home buyers who choose it.
The Government intends that legislation to establish the property tax will be introduced into the NSW Parliament during the second half of 2022. This will result in 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.
To be eligible a participant must meet the following criteria:
|Individual Criteria||A participant must:
|Previous Ownership and Receipt of Other Schemes||A participant or their spouse must not have previously:
|Property Price Limit||The property to be purchased must be worth less than or equal to $1.5 million|
|Place of Residence Requirement||The purchased property must be moved into within 12 months of purchase and lived in continuously for at least 6 months|
|Date Applicability||The contract of purchase must be signed on or after the scheme commencement date|
Stamp Duty or Property Tax
Once you have established whether you’re eligible to participate in this scheme you can choose between; paying the usual amount of stamp duty based on the dutiable value of your property, or paying an annual property tax based on the unimproved land value of the property.
The applicable conditions under each option are generally as follows:
|Stamp Duty||Existing first home buyer duty exemptions and concessions are not changing.
If the first home buyer is not eligible for a duty exemption or concession, the normal rates of stamp duty apply.
|Property Tax||The annual property tax payments will be based on the land value of the purchased property. The property tax rates for 2022-23 will be:
For further details on the scheme and to assess any specific applicability to your particular situation, it’s recommended that you speak with your tax agent or investment adviser.
Why Vogue Homes
We hope this blog has been informative and will help you navigate through your first home-building journey. If you’re looking for a valued partner that will understand your needs and provide customised service, look no further than us here at Vogue Homes.
We have over 38 years of experience in the industry and specialise in House and Land Packages for First Home Buyers. When you come to us we’ll spend the time to get to know your unique needs, and then provide a range of building solutions that are able to meet your family lifestyle needs and the level of comfort you deserve.For any of your First Home Buyer needs, why not contact us today.