The NSW Government has announced that from January 2023 First Home Buyers will have a choice either to pay stamp duty on the purchase of their first home (should they be required to do so) or pay an annual tax based on the unimproved land value of that property.
The current First Home Buyer Stamp Duty concessions are not changing, however under the current scheme First Home Buyers get a full exemption from stamp duty for properties purchased up to the value of $650,000.00, and a concession on the duty payable for properties valued between $650,000.00 and $800,000.00. There is currently no discount on duty for First Home Buyers for properties purchased for over $800,000.00.
To be eligible to make the choice between paying Stamp Duty or paying an annual tax on the land:
- You must be over 18 years old
- You, or at least one person you’re buying with, must be an Australian citizen or permanent resident
- You or your spouse must not have previously:
- owned or co-owned residential property in Australia
- received a First Home Buyer Grant or duty concessions.
- The property you are buying must be worth less than or equal to $1.5 million
- You must move into the property within 12 months of purchase and live in it continuously for at least 6 months
- You must sign the contract of purchase on or after 16 January 2023.
The annual property tax will be calculated on the unimproved land value of the property. The rates for the taxation year of 2022-23 will be:
- $400 plus 0.3 per cent of land value for properties who are owner occupied;
- $1,500 plus 1.1 per cent of land value for investment properties.
However, First Home Buyers must be made aware that these taxes will be indexed annually which means the annual tax payment will rise in line with average incomes.
To find out more about the changes to Stamp Duty for First Home Buyers or to discuss anything property related please contact our specialist Property Solicitors on (02) 4627-3333.
This article was published on 20/09/22 and the information is valid only to the date of publishing. This article should be considered merely general and non-specific on the subject matter and is not and should not be considered or relied on as legal, advice. Meehans Solicitors is not responsible in the event this information is relied upon by the reader in the absence of specific legal advice.