First home buyers in Davidson will now be able to unlock the dream of home ownership sooner following the successful passage of the Perrottet Government’s historic legislation in Parliament today.
For the first time in Australia, first home buyers will be given the choice between paying a smaller annual property payment or a large upfront stamp duty on their first property.
Member for Davidson Jonathan O’Dea today welcomed the new policy, which will help thousands of people get a foot on the property ladder sooner.
“This reform will help young families and individuals in Davidson saving for their slice of the great Australian dream,” Mr O’Dea said.
“First Home Buyer Choice will significantly reduce upfront costs, shaving around two years off the time needed to save for a deposit. Importantly, the majority of eligible first home buyers will pay less tax overall.”
Eligible first home buyers will be able to opt into the First Home Buyer Choice from this Saturday.
First home buyers will be required to pay stamp duty on purchases made until 15 January 2023, but then will be able to apply for a refund of their stamp duty if they choose to opt into the annual fee.
From 16 January 2023 purchasers can opt in to the annual fee directly and will not be required to pay stamp duty.
First Home Buyer Choice will be available for dwellings costing up to $1.5 million. For the purchase of vacant land intended for the construction of a first home, the price cap will be up to $800,000.
The program is uncapped and will be available for every eligible first home buyer who wants to access it.
NSW Treasury data shows the breakeven period between upfront stamp duty and an annual property fee would be 36 years for an $800,000 apartment, 28 years for a $1 million townhouse, and 26 years for a $1.25 million house.
The same data shows that if a first home buyer purchased a $1 million house and sold it 10 years later, which is around the median holding period, the annual property payments over the 10 years would total $19,881 in present value terms compared with $40,090 in upfront stamp duty - a saving of $20,209.
The NSW Government has allocated $728.6 million to First Home Buyer Choice over the next four years.
The First Home Buyer Choice is a key component of the Government’s $2.8 billion Housing Package announced at the 2022-23 NSW Budget that aligns with the Housing 2041 vision.
For more information on the First Home Buyer Choice, go to
https://www.nsw.gov.au/initiative/first-home-buyer-choice.
An online calculator is available to assist first home buyers to assess their options. To view the calculator, go to https://www.service.nsw.gov.au/transaction/calculateyour-property-tax.
