The latest NSW Government Budget included a ground breaking new policy to offer first home buyers the choice to pay a one-off lump sum tax (‘stamp duty’) or an annual land tax when purchasing homes under a certain value.
What do the changes to stamp duty mean for first home buyers?
From Monday 16 January 2023, many looking to buy their first home will have the choice of paying stamp duty (an up-front, one-off lump sum) or an annual land tax.
The land tax would be at the rate of $400 per year, plus 0.3 per cent of the land value, annually. This choice will be available to first-home-owners purchasing a property under $1.5 million with the aim of assisting buyers to access the property market quicker.
From 16 January 2023, eligible first home buyers who opt into the First Home Buyer Choice will not pay stamp duty on their purchase. The property will not be locked into the scheme if it is sold.
First home buyers will continue to be eligible to apply for full stamp duty exemption for properties up to $650,000. Stamp duty concessions remain in place for properties between $650,000 and $800,000.
Will other states follow suit?
It is possible other states may follow a similar trend of replacing stamp duty with land tax, partly due to stamp duty being an extraordinarily bad tax which goes against basic taxation principles.
The Australian Capital Territory has already implemented similar changes. Land tax is being phased in over 20 years, so homeowners are not caught paying two lots of tax.
Remember, you can reach out to your Halletts adviser anytime if you have questions in relation to your or your family members who are looking to purchase their first home.
For More information :- https://www.planning.nsw.gov.au/News/2022/Opening-doors-for-more-first-home-buyers