First Home Buyer Choice Key Features

After the NSW Government made into law the Property Tax (First Home Buyer Choice) Act 2022 in mid-November, NSW first home buyers (FHBs) will have the option to exchange stamp duty for an ongoing property tax from the 16th January 2023.

This reform is wonderful news because saving up for stamp duty is a major hurdle for most first-home buyers. So, what are the key features of the First Home Buyer Choice that FHBs need to know?

The Property Tax (First Home Buyer Choice) Act 2022 will commence on 16 January 2023. From this date, FHBs will have the option to forgo paying stamp duty in favour of a recurring annual payment.
Eligible first-home buyers who sign a contract of purchase between 11 November 2022 and 15 January 2023 will also be able to choose the property tax.
The First Home Buyer Choice covers property values up to $1.5 million. For the purchase of vacant land for the construction of a new home, the price cap on the scheme is $800,000.
The First Home Buyer Choice is available for both Australian citizens and permanent residents.
The property you are purchasing can either be new or established.
The first home buyer must move into the new home within 12 months of buying the property and live there for a continuous period of at least six months.
The scheme is open to owner-occupiers only, although the property can later be turned into an investment property with a markedly higher rate of ongoing property tax.
Instead of the upfront stamp duty, there will be a yearly property tax of $400 + 0.3% of the land’s value.
For properties up to $650,000 (no stamp duty), stamp duty exemptions will still be available, and for properties up to $800,000, stamp duty concessions will still be available (stamp duty sliding scale).
Only those purchasing their first home have the choice to pay an ongoing property tax; all others that are not first-home buyers must pay stamp duty.

This strategy that serves as an incentive for first-home buyers will definitely help them, especially those who do not qualify for the concessions on stamp duty. However, the increase in housing demand in an otherwise soft market would be a possible drawback of this scheme.

Watch this video to learn more.

Maria Papa is a senior property and finance expert specialising in home loans, investment loans, self-employed loans, alt doc loans, car loans, personal loans, and loan protection. She has offices in Sydney, Melbourne, and Manila. If you have questions, you can call Maria at 0430 144 008 or email her at mpapa@maverickfinance.com.au.

Disclaimer: Your full financial situation will need to be reviewed prior to acceptance of any offer or product.

Tags: Filipino mortgage broker, First Home Buyer Choice, Government Schemes and Grants, home loans, Maverick Finance, New South Wales, Property Tax

Sign Up For Home Loan Tips

We are a team of qualified professionals who have been in the mortgage broking industry for the last 10 years. We are also property investors who have accrued the knowledge and experience to help you achieve your property goals.

Learn the right strategy and find the resources to empower you to buy your first home, to refinance or to purchase your first investment property. Our team of brokers can guide you through the home buying process and answer your questions,
including:
➔ Where and what you can buy?
➔ How much deposit will you need?
➔ How much can you borrow?
➔ What are all the other costs involved?
➔ How can you repay my mortgage quickly?
Our role as your mortgage broker is to guide you through the process to ensure that all your needs and options are considered.