From 1 July 2023, the increased first-home buyer assistance thresholds and other NSW housing grants and concessions will came into effect.
The previous NSW government last year enacted legislation to give first-home buyers options to pay a property tax instead of stamp duty. Prospective first-home buyers who are purchasing a property under $1.5 million can choose a $400 annual fee and 0.3% of the land value while it is their primary residence instead of stamp duty, with the property not locked into the tax after being sold. An online calculator on the service NSW website allowed people to compare what they would pay for stamp duty compared with property tax. The property tax scheme was rationale that the people of NSW tend to sell their homes within 10 years, and the scheme intends help homebuyers to save for deposits and buy their home sooner, without the worries of also having to save up for normal, or concessioned stamp duty lump sum.
The Minns government will move to abolish the previous coalition government’s first home buyer land tax choice and increase stamp duty exemptions starting from 1 July 2023. These new changes include:
First-home buyers are exempted from paying stamp duty when purchasing a property up to $800,000.00, up from the previous $650,000.00.
First home buyers are eligible to reduced stamp duty if purchasing a property between $800,000.00 and 1 million, changed from the between $650,000.00 to 800,000.00.
The amendments now require first-home buyer to reside in a home as the person’s principal place of residence for a continuous period of at least 12 months to be eligible for a duty exemption or concession, up from the previous 6 months.
First homebuyers purchasing their new home for 1 million or more will not be eligible for transfer duty exemptions or concessions and will be required to pay full stamp duty.
The Labor government submits that the new scheme is a fairer and simpler system to assist first-home buyers in owning their first property. Under this new scheme, a first-home buyer will save $31,000.00 in stamp duty if they buy a property worth $800,000.00. However, properties more than 1 million will not be eligible for any assistance.
Purchasers who exchange contracts on or before 30 June 2023 will have up until settlement to opt-in to property tax. From 1 July 2023, there will no longer be options to choose between property tax and stamp duty on new purchases. The Government has confirmed that homeowners who have already opted into property tax can continue to pay the property tax until the property is sold.
If you are unsure about these new changes or have any property inquiries, contact our lawyers and conveyancers at Longton Legal so that we may help you through any uncertainty.
*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice before taking any course of action.*
Senior Associate | Accredited Property Law Specialist NSW | Nationally Accredited Mediator
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