What is the NSW Government’s First Home Buyer Choice Scheme?
Thinking about purchasing your first home, and feeling overwhelmed by all the costs involved?
We’ve got great news for you.
The NSW Government has introduced the First Home Buyer Choice scheme to help lighten your load.
In this blog, we explain what the scheme is all about and if you are eligible.
What is the First Home Buyer Choice scheme?
The initiative allows those purchasing a home for the first time in New South Wales to choose between paying stamp duty upfront or a smaller annual property tax.
Am I eligible?
You are eligible if you tick ALL of the following boxes:
you are purchasing your first home. (You cannot do this through a company or trust though.)
you are aged 18 and over.
you are an Australian citizen or permanent resident (or whoever you are buying the property with is).
you (or whoever you are purchasing the property with) have not owned or co-owned a residential property in the past.
you (or whoever you are buying the property with) have not previously received the First Home Owner’s Grant or any other duty concessions.
you are purchasing a property that is worth $1.5 million or less.
you plan to live in the property for at least 6 months within 12 months of your purchase.
you have signed a Contract for Sale and Purchase of Land since 11 November 2022.
What is the difference between stamp duty and an annual property tax?
Stamp duty (also known as transfer duty).
This is a tax that the NSW Government charges you at the time that you buy a property.
It is calculated based on the price you pay for the property or what the market says it is worth (whichever is higher).
Annual property tax
It is a tax that you pay based on what your purchased property’s land value is on a quarterly or annual basis.
This tax is calculated based on the relevant financial year.
For instance, for the financial years ended 30 June 2023 and 30 June 2024, the tax will be:
$400 plus 0.3 percent of the land value for owner occupiers; and
$1,500 plus 1.1 percent of the land value for residential investors.
How can I make an informed decision on whether to pay stamp duty upfront or an annual property tax?
Here is a useful calculator which compares the estimated amount of stamp duty against the estimated annual property tax you may need to pay.
How do I apply to pay the annual property tax instead of stamp duty?
We can help you submit your application here.
The takeaways
The NSW Government’s First Home Buyer Choice Scheme is designed to help first home buyers deal with the upfront costs of purchasing a property.
Consider whether you are eligible for the scheme, and if you are having difficulty making a decision on whether to pay stamp duty upfront or opt to pay a smaller annual property tax, get in touch.
