- Buyers can opt in for an annual tax or the stamp duty upfront
- Saving for stamp duty alone can take several years
- Property Council has welcomed the announcement, but says more reviews and reform are needed
The New South Wales government has passed new legislation that allows most first home buyers to decide whether to pay stamp duty upfront – as is the norm – or a smaller annual property fee, similar to a council rate.
NSW Premier Dominic Perrottet said the program, called First Home Buyer Choice, would be a “game-changer” for first-home buyers.
“The great Australian dream of home ownership just got much easier for a generation of young families,” Mr Perrottet said.
“For the first time we will provide first home buyers with a choice, helping thousands of people to shave around two years off the time needed to save for a deposit.
“People can now save huge sums of money on the biggest purchase of their life.”
Treasurer Matt Kean said the law would allow first-home buyers to enjoy the financial security that comes with home ownership.
“First Home Buyer Choice will significantly reduce upfront costs, reduce the time needed to save for a deposit and will see the majority of eligible first home buyers paying less tax overall,” Mr Kean said.
“We are giving people the opportunity to decide for themselves what best suits their financial situation. Those buying a home to live in for life can still choose stamp duty, but for many, paying an annual tax for the limited time they actually live in the property will make more sense.”
The specifics
Under the program, eligible first home buyers can access the scheme from this Saturday, 12 November.
However, those buyers will be required to pay stamp duty until 15 January 2023. After this date, they apply for a refund, if they choose the annual fee. After this date, purchases can opt in directly.
Dwellings costing up to $1.5 million will all under the scheme, while for the purchase of vacant land intended for a first home, the price cap will be up to $800,000.
The program is uncapped.
Industry response
The Property Council of Australia has welcomed the reform, noting that stamp duty is an inefficient and volatile tax, but says more needs to be done to better assist home buyers.
“We are pleased to see this this legislation has now passed the NSW Parliament and hope it is the first step to further reform that extends beyond first home buyers and considers genuine reform across all sectors of the market in line with our previous call for broad based tax reform,” said Acting NSW Executive Director Adina Cirson.
“We welcome this reform which will help Australian’s buy their first home and it is pleasing to see the genuine opt-in choice has remained.
“However, we are disappointed, there is no inbuilt review of the reform to ensure there is no increase in cost of housing development and it does not result in a disproportionate impact on other parts of the property sector as has been experienced in the ACT over the last ten years.”
“As such we will continue to monitor the first stages of this tax reform.”
