An estimated 84% of first home buyers in NSW will soon save on stamp duty
An estimated 84%* of first home buyers in NSW will be exempt for stamp duty or save on reduced stamp duty rates after the introduction of new laws that come into effect from 1 July 2023.
One notable feature of the recently introduced legislation is the increase to the stamp duty threshold for exemptions. Previously $650,000.00, it has now been increased to $800,000. This will result in significant cost reductions for first home buyers. For example, a buyer purchasing a property valued at $800,000 can expect savings on stamp duty of up to $31,090 compared to the previous thresholds.
There are also concessional rates of duty for first home buyers for properties valued up to $1,000,000.
Example savings under new laws
| Purchase Price or Value | Existing duty regime | New duty regime | Savings on duty |
|---|---|---|---|
| $700,000.00 | $10,363.00 | $0.00 | $10,636.00 |
| $750,000.00 | $20,727.00 | $0.00 | $20,727.00 |
| $800,000.00 | $31,090.00 | $0.00 | $31,090.00 |
| $850,000.00 | $33,340.00 | $10,023.00 | $23,318.00 |
| $900,000.00 | $35,590.00 | $20,045.00 | $15,545.00 |
| $950,000.00 | $37,840.00 | $30,068.00 | $7,773.00 |
| $990,000.00 | $39,640.00 | $38,086.00 | $1,555.00 |
| $1,000,000.00 | $40,090.00 | $40,090.00 | $0.00 |
| $1,100,000.00 | $44,700.00 | $44,700.00 | $0.00 |
| $1,250,000.00 | $52,950.00 | $52,950.00 | $0.00 |
As part of these reforms the NSW Labor government will close access to the former First Home Buyer Choice (FHBC) scheme on 30 June 2023.
The annual property tax was known as the First Home Buyers Choice scheme and was available to buyers who signed a contract of sale between 11 November 2022 and 30 June 2023. Those first home buyers could choose between paying stamp duty or pay no stamp duty and pay an annual property tax instead (a similar concept to land tax).
However, to ensure a smooth transition, the new laws will incorporate grandfathering provisions – meaning first home buyers who had previously chosen the annual property tax can continue paying that tax until they decide to sell their property.
Another significant change in the new laws is to the residency requirement, with the new laws now requiring first home buyers to inhabit the property for a minimum duration of 12 months, instead of the previous 6 month period, to be eligible.
*Source: The Premier, Treasurer. (2023, May 22). More first home buyers paying no tax under Minns Government. NSW Government. nsw.gov.au/media-releases/tax-concessions-for-first-home-buyers
Adrian Palazzolo
Legal Advisor
Adrian, a legal advisor at Lawlab, obtained his law degree in Melbourne. His expertise lies in property law and conveyancing, and he continually strives to expand his knowledge in these areas of professional interest. During his leisure hours, he relishes quality time with his close-knit circle of friends and family.
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