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As election promises ramp up ahead of the NSW state elections on 25 March, the national lobbying group has endorsed a raft of changes to the First Home Buyer Choice program pledged by the Coalition.
On 26 February, NSW Premier Dominic Perrottet announced his government would expand stamp duty reforms if re-elected in next month’s election.
The reforms will expand on the stamp duty tax concessions under the First Home Buyer Choice scheme, which kicked off on 16 January.
First announced back in June 2022 as part of the state government’s integrated multi-billion dollar housing package, eligible first home buyers can now choose to pay either an annual land tax or a larger, one-off stamp duty when buying a house valued up to $1.5 million.
The scheme also provides a full stamp duty exemption for properties purchased up to $650,000, while those between $650,000 and $800,000 receive a concession on stamp duty.
Currently, the option is only available to first home buyers. This means that when they buy their second home, they will be obliged to pay stamp duty.
Under a proposed expansion of the scheme, home owners would also be given the option to pay land tax for their second property. Accordingly, stamp duty would only be imposed when a buyer picked up their third property.
In its statement unveiling the planned extension of the scheme, the Coalition stated the election pledge is in line with their belief in providing choices.
“Just as it forms a barrier to getting the keys to a first property, stamp duty also prevents or penalises families from moving to the home that suits them best at every stage of life.
“That is why the NSW Liberal and Nationals will allow people who opted into the small annual payment on their first home to continue on their property journey by paying a small annual payment instead of stamp duty,” it stated.
The cap of $1.5 million for first home buyers wanting to opt-in to land tax will also be raised by $50,000 every year starting from the financial year of 2023–2024 if the Perrottet government wins the state election, widening the choice of properties that can be purchased under the scheme.
Notably, the changes will also apply to people who purchased a property in the state since 11 November 2022 and received a stamp duty concession.
Property Council’s acting NSW executive director Adina Cirson welcomed the planned move, stating that it would provide first home buyers with an opportunity to get into their first home faster in the “midst of a very real housing crisis confronting so many in NSW”.
“Stamp Duty is an inefficient tax that is an additional barrier for people being able to purchase a home and is a dampener on mobility within the housing market,” Ms Cirson said.
With 1,000 people having already opted into the expansion of the First Home Buyer Scheme since it was rolled out in January, Ms Cirson said that there is now a tangible case to advocate for further tax reform.
“The expansion of the First Home Buyer Scheme which commenced earlier this year is welcome news to enable purchasers to have more of a choice when it comes to future housing.
“With the NSW Liberals and Nationals providing home buyers with an ‘option to pay’ a small annual fee on a first home instead of an upfront stamp duty is a positive first step and we hope will pave the way for broader tax reform,” she stated.
Ms Cirson also lauded the attention given to annual reviews of the cap, following strong advocacy from the Property Council on the matter.
“We have been calling for an annual review to the cap as increasing property prices would limit the stock available in future years,” she said.
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