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