What is the new policy?
The NSW Government has announced that first home buyers purchasing properties for up to $1.5 million will be able to choose to pay an annual property tax instead of stamp duty. The property tax will only be payable by first home buyers who choose it, and will not apply to subsequent purchasers of a property.
Existing First home buyer duty exemptions and concessions are not changing.
- $650,000 or less – exemption
- Above $650,000 to $800,000 – concession
- No first home buyer stamp duty concessions for properties worth more than $800,000
When is the new policy enforced?
Eligible first home buyers who sign a contract of purchase on or after 16 January 2023 will be eligible to opt into the property tax and will not be required to pay stamp duty in order to complete their transaction.
Eligible first home buyer who sign a contract of purchase between the passage of the legislation and 15 January 2023 will be eligible to opt into the property tax. However, these purchasers will be required to pay any applicable stamp duty within the usual required periods and from 16 January 2023, will be able to apply for and receive a refund of that duty.
* Passage of the legislation: it is a process or law making. To make laws, Parliament must pass legislation which is also known as ‘statutes’ or Acts of Parliament.
How to Calculate Propety Tax?
The annual property tax payments will be based on the land value of the purchased property. The property tax rates for 2022-23 will be:
- $400 plus 0.3 per cent of land value for properties whose owners live in them.
- $1,500 plus 1.1 per cent of land value for investment properties.
Am I eligible?
To be eligible:
- you must be an individual (not a company or trust)
- 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
To find out if you are eligible or for more real estate related news and policies, click here to book a 45 minutes free consultation with Realtisan experts.
