Stamp duty reform could lower the entry point for first home buyers

As part of the 2022-23 NSW state budget, the New South Wales Government announced that first home buyers in New South Wales purchasing properties up to $1.5 million will be to be able to choose between paying an annual property tax or transfer duty (formerly known as stamp duty). The property tax will only be payable by first home buyers who choose it, and will not apply to subsequent purchasers of a property.

With rising housing prices, the New South Wales Government hopes that this initiative will lower the bar to entry into the property market for first home buyers.

Under the new initiative, first home buyers purchasing a property of up to $1.5 million can opt to pay $400 plus 0.3 per cent of the land value.

Example

If you are buying a $1 million house (with a land value of $600,000) transfer duty would be $40,305.

Under the new reform, first home buyers would instead be paying $2,200 per year, meaning that first home buyers would be better off if they keep the property for less than 18 years, which adds up to $39,600).

If you are a first home buyer looking to take advantage of this scheme and wish to get into the property market, please contact Titance Legal to see if you are eligible and for all other property law and conveyancing needs.