First Home Buyers Land Tax Scheme Launched in NSW, Hailed as a "Game-Changer"

First-time homebuyers in New South Wales will now have the option to pay an annual property fee or an upfront stamp duty payment, according to 9NEWS. This reform has been hailed as a "game-changer" by the premier.

NSW Premier Dominic Perrottet said it marked "new thinking" by the Coalition government. "Our plan means first home buyers will shave years off the time needed to save for a property and will help them achieve their home ownership dreams. This will be a game-changer for first home buyers. The Liberal and Nationals are backing first home buyers to get the keys to their first home sooner," he said.

What is First Home Buyer Choice?

The First Home Buyer Choice scheme allows first-time property buyers to forgo paying upfront stamp duty and instead pay a smaller annual tax. The objective of the scheme is to lower the expenses associated with entering the property market by eliminating stamp duty, which can be a significant additional cost on top of the house's price. This means that first-time homebuyers can choose to pay an annual property tax and a percentage of the land's value instead of paying a lump sum upfront.

Who is 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

  • received a First Home Buyer Grant or duty concessions.

• you must sign the agreement for sale or transfer of land on or after the initiative commencement date (see below for details)

• the agreement for sale or transfer of land must be signed on or after 11 November 2022, or

• an off the plan purchase contract, must be signed on or after 11 November 2021 and settlement is on or after 11 November 2022.

*The Chief Commissioner may waive this requirement upon application. Contact Revenue NSW for more information.

What properties are eligible to opt into property tax?

• A new or existing home in NSW with a value not exceeding $1,500,000 or

• Vacant land in NSW, on which you intend to build your first home, with a value not exceeding $800,000.

What properties are not eligible to opt into property tax?

• Primary production land.

• Land used for business or a business premises.

• Holiday homes.

How to Apply for First Home Buyer Choice?

Complete two application forms (for general application - purchases dated from 16 January 2023)

• First Home Buyer Choice application form

• Purchaser/Transferee Declaration form (individual)

and supply evidentiary requirements to your conveyancer or solicitor who will lodge your application with Revenue NSW as part of the conveyancing process.

For details, please visit https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/first-home-buyer-choice

Source: 9NEWS, Revenue NSW (updated on 30 March 2023)