This article is from the Australian Property Journal archive
FIVE out of every six first home buyers will pay no stamp duty or a reduced rate under legislation changes to be introduced into NSW Parliament.
Under the new Minns Labor government’s changes to the First Home Buyers Assistance scheme, the threshold for stamp duty exemptions for first home buyers will be lifted from $650,000 to $800,000 and stamp duty concessions from $800,000 to $1 million.
A first home buyer purchasing a property at $800,000 will save up to $31,090 under the changes.
Late last year, the previous NSW Coalition government gave first home buyers the option to choose between paying stamp duty or a land tax on homes valued up to $1.5 million – giving them the option to avoid paying a $66,000 stamp duty sum upfront. However, the Labor government that was elected in March had committed to changing that from the beginning of July. Access to the First Home Buyer Choice (FHBC) will be closed.
Legislation will include grandfathering provisions, so first home buyers who opted into the annual property tax can continue to pay that tax until they sell their property.
The government believes the changes to the First Home Buyers Assistance scheme will result in a simpler, fairer system than the FHBC, “where first home buyers purchasing properties at the top of the range under the former government’s scheme received a disproportionate share of the benefits”.
“I understand the stress of trying to purchase your first home. I want more singles, couples and families realising this dream,” NSW Premier Chris Minns said.
“This is a fairer and simpler system to ensure more first home buyers have a chance of owning their first property.”
According to CoreLogic, the NSW median house price is currently $1,031,138.
NSW Treasurer Daniel Mookhey called the FHBC a “forever tax on your home own”.
“More first home buyers will pay no tax under Labor’s scheme instead of a land tax.
“This policy will deliver the most help to the first home buyers most at risk of leaving the housing market all together as interest rates go up.
“The new thresholds for stamp duty exemptions and concessions are a simpler and fairer way to help more first home buyers than the property tax, which helped a smaller cohort of first home buyers.”
The government said the new legislation would also improve the integrity and targeting of first home buyer assistance programs, increasing the requirement to live in the home from six months to 12 months.
The Victorian government had been considering giving home buyers the option of paying an annual land tax instead of the large upfront stamp duty ahead of today’s budget, and the opposition had said it is open to changes. But Premier Daniel Andrews poured cold water on potential changes, saying he was “unconvinced” by the scheme.
“I’m not entirely certain that it is everything that people make it out to be. You had a policy decision made in NSW, then when it got implemented it went from being a compulsory scheme with all these macro benefits…(to) an optional scheme,” he told reporters last week.
“I don’t know they necessarily get all of that aggregated benefit if it’s not happening everywhere.”
