Stamp Duty Reform
We’ve talked about First Home Buyers Choice, now let’s talk Stamp Duty Reform!
With the NSW government having announced relief for first home buyers in the 2022-23 NSW State Budget, the multi-billion-dollar housing package designed to make first-time home-buying more affordable really is doing just that.
The NSW stamp duty reform has finally passed in State Parliament, despite its initial proposal nearly six months ago! But what does this mean for you?
Why is this a good thing?
First home buyers can choose to pay either a smaller annual property fee following the purchase of their property, or a large upfront stamp duty. And considering the stamp duty alone typically takes a young family two years or more to save, it’s a great opportunity to get lower income earners into houses of their own sooner rather than later!
Home ownership will definitely become much more attainable following this reform, particular for those who have been left behind in the property market due to life circumstances and financial constraints. With predictions circulating that approximately 80% of home sales will benefit from the scheme, I’m eagerly anticipating seeing families and lower income earners in houses of their own in the coming months!
What are my options?
From 16 January 2023, NSW first home buyers can choose to pay either the upfront stamp duty or the annual property tax ($400 plus 0.3% of the land value of the purchased property). Property purchased must be below $1.5m in value, or valued at under $800k if vacant land.
So imagine for a minute that you’ve got your eye on a property worth $700,000. Your upfront stamp duty will cost you approximately $10,435 on top of your deposit, while your annual property tax will cost you only $1,600 per annum, assuming your land value is $400,000.
Which option is right for me?
You might be looking at the example above and thinking, “but I plan to live in the property long-term. It doesn’t make sense to pay $1,600 over the duration of my 20-year residence!” And you’re absolutely right.
The scheme is beneficial to many types of buyers, but especially those struggling to save up the big bucks for a deposit. Remove the stamp duty and unsurprisingly, many first time buyers are able to afford placing a deposit on their first family home.
If you intend to retain the purchased property for the long-term and can afford the large upfront sum, paying stamp duty may be more beneficial to you. Though if you’re hoping to sell in the next 10 years, paying the annual property fee will be better for you in the long-term.
When can I apply?
Eligible first home buyers can access the scheme from 12 November 2022! But keep in mind that buyers making purchases prior to 15 January 2023 will still be required to pay stamp duty. After this date, they can apply for a refund of their stamp duty fees, if they decide to opt into the scheme.
With $728.6 million allocated to the First Home Buyer Choice scheme over the next four years, I’m feeling good about where homeownership is headed after such a tumultuous time in the industry.
If you’re unsure of anything or are ready to take a leap into property ownership, give us a call at the office on (02) 8916 6172 or send us an email at firstname.lastname@example.org. We’d love the opportunity to ensure your property buy is optimised.