The New South Wales Government has announced a new budget proposal proposing to allow First Home Buyers to dodge the stamp duty payment by electing to pay an annual property tax instead. This budget proposal eases a huge financial burden upon the First Home Buyers as it lowers the upfront costs of buying a property in New South Wales. This is great news for many first home buyers as this lowers the barriers to purchase a property in NSW. Making many first home buyer’s dream to purchase a place of their own more achievable.
Eligible first home buyers will have two options to pay for the tax:
1. Stamp Duty
First home buyers will continue to enjoy stamp duty exemption or concession for properties under $800,000.00
2. Property Tax
First home buyers who elects to pay for the property tax instead of the upfront stamp duty will pay an annual property tax of $400 plus 0.3% of the land value of the property.
Eligibility to opt-in for annual property tax payments
1. Over the age of 18 years;
2. Australian Citizen or PR;
3. Never owned a property in Australia before (both purchaser and their spouse/partner);
4. Must occupy the property as their principal place of residence for a continuous period of 6 months within 12 months from the settlement date.
5. Purchase price must not exceed $1.5 million;
Commencement of the New Property Tax
The NSW government plans to enact the legislation later this year and roll out the annual property tax scheme from 16 January 2023.
Should you have any enquiries in relation to this annual property tax, please feel free to contact betsy.yeong@sunlaws.com
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