The First Home Buyers Choice Initiative is a NSW tax reform to give eligible first home buyers an option to avoid paying upfront stamp duty.

The First Home Buyers Choice initiative, due to commence on 16 January 2023, enables eligible first home buyers to opt in for an annual land tax fee of $400 plus 0.3% of the land value or pay the upfront stamp duty lump sum. The initiative is capped at properties worth up to $1.5 million and is only available to first home buyers.

First home buyers, purchasing a property to live in, will continue to be eligible for full stamp duty exemptions for properties valued up to $650,000 and partial exemptions for properties valued between $650,000 and $800,000.

A first home buyer purchasing a property to live in valued at $830,000, with a land value of $265,000 will pay either an upfront stamp duty of $32,655 or an annual property tax of $1,195. First Home Buyers Choice initiative tax rates will be indexed each year, so that the average property tax payment rises in line with average incomes. For properties that are owned for less than a full financial year, a pro rata adjustment will be made based on the number of days in the year the property is owned. The property will not be locked into the scheme if sold. 

Only first home buyers are eligible to pay the property tax. All other purchasers must continue to pay stamp duty as normal. If you are buying a property from somebody who is paying the property tax, you will not be subject to the property tax (unless you are also an eligible first home buyer and you choose to pay the property tax).

 

Eligibility for the First Home Buyers Choice Initiative

  • 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.
  • The property you are buying must be worth less than or equal to $1.5 million
  • You must move into the property within 12 months of purchase and live in it continuously for at least 6 months
  • You must sign the contract of purchase on or after the scheme commencement date (see below for details).

 

More details for the First Home Buyers Choice Initiative can be found on the NSW Government Website

 

Contact an Assured Lending Mortgage Broker for more information today

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