Written by From 16 January 2023, the First Home Buyer Property Tax Option will enable first home buyers to choose between paying upfront stamp duty on the land transfer or a small annual property tax. The property tax is part of a Budget housing policy which included trialing a shared equity scheme for singles and key public servants.
Those who opt into the property tax will be charged at a rate of $400 plus 0.3% of the unimproved land value of the property in each year of ownership. However, if a property is subsequently used as a residential investment, the annual rate of property tax is $1500 plus 1.1% of the property’s unimproved value in 2022-23. First home buyers of land worth up to $1.5 million will be able to claim the tax option. These buyers can still choose to pay stamp duty, which may appeal to first-home buyers intending to hold the land for a significant period. Additionally, those who have executed contracts in the period between enactment of the legislation and 15 January can obtain refunds of stamp duty already paid. Further details of the changes to NSW State taxes are in the 2022-23 Budget No. 1.