First-time homebuyers will be able to choose between paying upfront or reducing their annual property tax as part of reforms that will make home ownership possible for more NSW residents.
First Home Buyer’s Choice is part of a multi-billion dollar integrated housing project announced in the NSW Budget 2022-23 to deliver affordable, accessible and quality housing. throughout New South Wales.
Former-Premier Dominic Perrottet said one of the Government’s priorities was to make home ownership a reality for many NSW families.
“We want to lower the barriers to owning a home for first home buyers seeking a place of their own,” Mr Perrottet said.
In the past two decades, the share of first home buyers under 35 years of age has declined from 67 per cent to 61 per cent. Lifting home ownership is part of this Government’s efforts and ambition to help families who are feeling the squeeze.
“The First Home Buyer Choice will remove one of the largest upfront costs to buying a home and help deliver a brighter future for first home buyers.”
Treasurer Matt Kean said the NSW government has allocated $728.6 million over the next four years to help first-time homebuyers buy their first home.
“We know that first home buyers are being forced to enter the property market later in life and this reform will make the property market more accessible for them,” Mr Kean said.
“It will mean more NSW residents will get into their first home at an earlier age and achieve the great Australian dream of home ownership.”
For a median income NSW household saving 15% of their income, the stamp duty will add about two years to the time it takes to save on average NSW housing upfront. .
The property tax option will be available for properties up to $1.5 million, helping more groups become first-time buyers. Together with existing home ownership initiatives, the government will support around 97% of all first-time homebuyers, or about 55,000 people a year.
Under the new initiative, first-time homebuyers who choose to tax the property will pay an annual property tax of $400 plus 0.3% of the assessed value of the property.
Planning and Housing Minister Anthony Roberts said the option to levy a property tax on first-time homebuyers would help boost home ownership rates across New South Wales.
“The NSW Government is also looking at initiatives to help boost housing supply by cutting planning assessment timeframes, co-funding enabling infrastructure and investing in new and improved social housing,” Mr Roberts said.
“This Government will use every lever at its disposal – including tax, planning, supply, or working with the Commonwealth — to give more people in NSW the opportunity to own their own home.”
The law establishing the property tax will be introduced in the second half of 2022, with eligible first-time homebuyers able to apply for the property tax from January 16, 2023. For contracts traded between the legislation and January 15, From 2023 eligible first-time homebuyers will be able to apply from January 16, 2023 and receive a refund of the registration tax paid .
Starting January 16, 2023, first-time homebuyers who are eligible to opt in to First Home Buyer’s Choice will not have to pay stamp duty on their purchases. The property will not be locked in the program if it is sold.
First-time homebuyers will continue to be eligible to claim full stamp duty relief on properties up to $650,000. Stamp tax concessions still apply to properties between $650,000 and $800,000.
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