Stamp duty exemptions set to rise for first home buyers
Although a bill was passed late last year to give first home buyers the option to pay an annual land tax instead of stamp duty on properties up to $1.5 million, this is expected to be abolished and be replaced with increased stamp duty exemptions instead.
Instigated by the then Liberal government, under the First Home Buyer Choice (FHBC) scheme the land tax option gave first home buyers the choice between a $400 annual fee and 0.3% of the land value while it’s their primary residence instead of stamp duty, and the property is not locked into the tax if sold.
Since the legislation was passed, almost 5000 properties have become a part of the scheme.
Suggested changes to the legislation
Under the Minns Labor Government’s changes to the First Home Buyers Assistance scheme, the threshold for stamp duty exemptions for first home buyers will be lifted from $650,000 to $800,000 and stamp duty concessions from $800,000 to $1 million.
That means a first home buyer purchasing a property at $800,000 will save up to $31,090 under the changes, according to the NSW Government press release.
NSW Treasurer Daniel Mookhey believes this will benefit more first home buyers overall. “Now 5 out of every 6 first home buyers will get help to own the roof over their heads. It will benefit more first home buyers overall and more fairly goes to those who need it most.
“The new thresholds for stamp duty exemptions and concessions are a simpler and fairer way to help more first home buyers than the property tax, which helped a smaller cohort of first home buyers,” he says.
Other suggested changes include increasing the requirement for first home buyers benefitting from low or no tax payments to live in the home for 12 months, rather than six months.
When will these changes come into play?
The Government states it will close off access to the FHBC scheme on Saturday 1 July 2023.
Legislation will also include provisions so first home buyers who opted into the annual property tax can continue to pay that tax until they sell their property.
Other help for first home buyers
The NSW and Federal Government have other schemes for eligible first home buyers. These include:
- First Home Owner’s Grant (New Homes)
If you are buying or building your first home, you may be eligible for a $10,000 grant under the First Home Owner Grant (New Homes) scheme.
Your first new home can be a house, townhouse, apartment, unit or similar that is newly built, purchased off the plan or substantially renovated.
- Shared Equity Home Buyer Helper
This initiative helps eligible home buyers purchase their own home with as little as a 2% deposit.
The NSW Government will contribute a proportion of the purchase price of a property in exchange for an equivalent interest in the property.
- First home super saver scheme (Australian Government assistance)
If you are eligible, you can save money for your first home inside your super fund.
It works by making voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions into your super fund to save for your first home.
- The Home Guarantee Scheme (Australian Government assistance)
This scheme supports eligible home buyers to purchase a home sooner and includes the
- First Home Guarantee – to support eligible first home buyers to buy their first home sooner, with a deposit as little as 5%.
- Regional First Home Buyer Guarantee – to support eligible regional first home buyers to buy a home in a regional area.
- Family Home Guarantee – to support eligible single parents with at least one dependent child to buy a home, with a deposit as little as 2%.
More details and links to the different schemes can be found on First home buyer grants and assistance page on the NSW Government.
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