New Stamp Duty Laws To Help More First Home Buyers

State governments around the country are keeping a watchful eye on New South Wales after the Perrottet Government made changes to first home buyers legislation. Officially launched in mid-January, The First Home Buyer Choice Scheme (FHBCS) is designed to fast-track buyers on the cusp of a property purchase straight into the housing market. It works by allowing eligible first home buyers to choose between making an up-front stamp duty payment, or making much smaller payments in the form of an annual land tax.

Opting to switch to an annual land tax could be a smart financial move depending on how long you plan to own a property. Check out our handy table below to see if the payoff works in your favour. Keep in mind that every time you buy a new property, you need to pay a new stamp duty. So if you expect to own the same property for less than 20 years, it looks like a safe bet.

Challenges for First Home Buyers

The property market in Australia has become increasingly competitive, with prices in major cities often climbing beyond reach. Some of the most common hurdles faced by first home buyers include:

• High deposits: Saving 20% of the purchase price can take years.
• Stamp duty costs: An extra expense that adds thousands to the overall cost.
• Loan approvals: Tighter lending criteria make it harder to qualify for a mortgage.
• Rising interest rates: Higher repayments can limit affordability.

These challenges highlight why smart financial planning is key for anyone aiming to become a first home buyer.

Government Support for First Home Buyers

To help more Australians enter the property market, the government has introduced several schemes and grants, including:

• First Home Owner Grant (FHOG): A one-off payment for eligible buyers.
• First Home Guarantee: Allows buyers to purchase with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI).
• Stamp Duty Concessions: Many states offer significant discounts or exemptions for first home buyers.
• Superannuation Access: The First Home Super Saver Scheme (FHSSS) allows buyers to use voluntary super contributions towards a deposit.

Table figures derived from 2022 NSW Treasury Data

FHBCS applications officially opened on the 16th of January, 2023 and must be lodged by 30th of June, 2023. For homebuyers who purchased a property between the announcement of the legislation on November 10, 2022 and the official launch in January, there’s also good news. If you signed a contract of sale or settled a property up to the value of $1.5 million between the 11th of November, 2022 and the 15th of January, 2023, you have a couple of options: 

• Any contract of sale signed from the 11th of November, 2022 announcement date has the option to choose an annual property tax on their settlement day.
• For  contracts exchanged between the 11th of November, 2022 and the 16th of January, 2023, eligible first home buyers may apply to retrospectively opt-in to the annual land tax. They must first pay any applicable stamp duty fees up front, before applying for a refund between the 16th of January and the 30th of June.

The opposition Labor Party has expressed doubts about the long-term viability of the scheme and declared plans to challenge the legislation in March’s upcoming state elections. So the heat is on for first home buyers who want to take advantage of the options while they’re still available. Those who opt in between now and the end of the financial year will receive the full benefits – despite any future changes to legislation. you can build a home without loan

To learn more about the new legislation, visit the NSW Government site.

Ready to purchase a property? Whether it’s a first home or an investment property, we’ve got you covered. Drop me a line today at an***@***************om.au and let’s start building your wealth.