Stamp Duty Changes for First Home Buyers from 1 July 2023: A Comprehensive Guide
At Baulkham Hills Conveyancing, we always aim to keep our clients abreast of the latest developments in the property market. One of the most significant changes this year pertains to the New South Wales Government’s amendments to the First Home Buyers Assistance scheme. Starting from 1 July 2023, these changes promise to make property ownership more accessible for first home buyers in the state.
A Simplified, Fairer System
The NSW Government is introducing a new scheme that will ensure 84% or 5 out of every 6 future first home buyers will pay no stamp duty or a reduced rate. The scheme’s primary change involves raising the threshold for stamp duty exemptions for first home buyers from $650,000 to $800,000 and providing stamp duty concessions for properties priced between $800,000 and $1 million.
Under the new scheme, a first home buyer purchasing a property at $800,000 will save up to $31,090 in stamp duty, and there will also be significant reductions in stamp duty for first-time buyers of properties up to $1 million.
Changes to the First Home Buyer Choice Scheme
The government will cease the previous government’s First Home Buyer Choice (FHBC) scheme, which allowed first home buyers to opt into an annual property tax instead of paying stamp duty on properties up to $1.5 million. This decision will take effect from 1 July 2023. However, first home buyers who have already opted into the FHBC scheme can continue to pay the annual property tax until they sell their property.
A More Targeted Approach
The Minns Labor Government aims to make the assistance programs for first home buyers more targeted and effective. One of the main criticisms of the previous government’s scheme was that first home buyers purchasing properties at the top of the range received a disproportionate share of the benefits. The new scheme aims to address this inequity by providing a fairer distribution of benefits, helping more first home buyers overall, especially those most at risk of leaving the housing market due to increasing interest rates.
Changes to the Shared Equity Housing Scheme
The government is also expected to make changes to the previous government’s shared equity housing scheme. While the current state government supports the concept of shared equity, they believe the existing system needs improvement, particularly in terms of eligibility criteria and property affordability thresholds.
While these changes are significant, it is also important to note that they need to pass through legislation. However, the government expects its new first buyer program to be in place by 1 July 2023.
At Baulkham Hills Conveyancing, we’re excited about these changes and the potential they have to support first home buyers. We’ll continue to keep you updated as more details emerge. If you have any questions about these changes and how they might impact your property buying journey, please don’t hesitate to get in touch with our expert team.
Please note that while every effort has been made to ensure the accuracy of the information in this article, it does not constitute legal advice and should not be relied upon as such. We recommend consulting with a professional for advice tailored to your situation.