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More than eight out of 10 homes sold in NSW would qualify for a scheme allowing first home buyers to opt for an annual land tax over paying one-off stamp duty, as the state government looks to open more doors for aspiring home owners.
About 84 per cent of homes sold across the state will be eligible under the new First Home Buyer Choice scheme set to take effect in January, according to the NSW government.
Under the new property tax option, which is part of the government’s $2.8 billion housing package in the June budget, eligible first home buyers will have the choice of a traditional upfront payment or a smaller annual property fee for properties with a purchase price of up to $1.5 million.
Instead of paying stamp duty, first home buyers can choose to pay a $400 annual fee and 0.3 per cent of the land value while it’s their principal place of residence. Additionally, the property won’t be locked into the scheme if it’s sold.
During Super Saturday (24 September) — when a total of 700 properties went under the hammer across the state — NSW State Treasurer Matt Kean underlined that getting first home buyers’ foot into the property ladder should be a top priority.
He stated that removing the upfront cost of stamp duty can give first home buyers a hand by removing years off the time it takes to save a deposit.
“This is all about giving first home buyers the power to choose an alternative to upfront stamp duty,” Mr Kean said.
For a NSW household with a median income that saves 15 per cent of their income, it was previously estimated that stamp duty adds about two years to the time required to save the upfront costs of the average dwelling in the state.
“We want to remove one of the barriers to entering the property market and help first home buyers realise the great Australian dream of home ownership sooner,” he added.
Minister for Homes Anthony Roberts stated that the government is always on the lookout for strategies on how to bolster housing supply.
“We will leave no stone unturned when it comes to initiatives that will help more people in NSW enter the market and own their own home,” Mr Roberts said.
Legislation to establish First Home Buyer Choice will be introduced into Parliament this September, with a total of $728.6 million earmarked for the FHB assistance in the next four years.
Meanwhile, other first home buyer grants, duty exemptions and concessions will continue alongside the stamp duty option.
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