One of the most significant unexpected costs for a new property has always been stamp duty, which can easily add an additional $40,000 - $50,000 or more required to purchase a property and can seemingly keep that dream first home just out of reach.
So in further assistance, the NSW Government's First Home Buyer Choice scheme is designed to lower the upfront costs of purchasing a home for first-home buyers by giving first-home buyers a choice: to either pay stamp tax or alternatively pay an ongoing land tax rate after their purchase.
If you are a first home buyer:
- The first thing to remember is that there are grants and concessions already in place under the First Home Buyer Assistance Scheme. You can currently receive a $10,000 grant towards the purchase price and you may be able to receive a stamp duty exemption or concession for properties under $800,000.
- The home has to be $1.5 million or less, you must be an Australian citizen or permanent resident, and you have to move into the house within the first year and live in it for at least six months.
The annual property tax payments will be based on the land value of the purchased property. The property tax rates for 2022-23 and 2023-24 will be:
- $400 plus 0.3 per cent of land value for properties whose owners live in them
- $1,500 plus 1.1 per cent of land value for investment properties.
These tax rates will be indexed each year from 2024-25, so that the average indexed property tax payment rises in line with average annual incomes. In addition, the year-to-year growth of individual property tax payments are capped at a maximum of 4 per cent.
As always contact Caroline at Tax Go for your taxation needs.