NSW Stamp Duty changes are coming for First Home Buyers
First Home Buyers in Sydney have long faced barriers to entry with saving a deposit + saving for stamp duty. As property prices continue to rise, this has been prohibitive for many first home buyers, and in the Sydney metro area, including the Inner West and Eastern suburbs, stamp duty concessions have generally allowed for the purchase of a 1 or perhaps 2 bedroom unit.
Further reform is just around the corner, which will help give first home buyers a competitive advantage against investors and help them enter the market sooner. From 16 January 2023, First Home Buyers purchasing up to $1,500,000 will have the option of paying upfront stamp duty or an ongoing annual property tax. But how do you know which is the better option?
Based on the purchase price of your property, and the date you sign a purchase contract, there are different options available for first home buyers:
How to decide if you are better off with the upfront stamp duty payment or the annual property tax?
Use our purpose built online calculator to compare the options - click here
Or to work this out manually:
Calculate the upfront payment noting this is a one off payment - click here
Calculate the annual property tax noting this is the value for year 1 and the tax will be adjusted up each year
Use the Property Address Enquiry to find the Property Number - click here
Use the Property Number to calculate the Land Value - click here
The annual property tax payments will be based on the land value of the purchased property. The property tax rates for 2022-23 will be:
$400 plus 0.3 per cent of land value for properties whose owners live in them
$1,500 plus 1.1 per cent of land value for investment properties.
These tax rates will be indexed each year, so that the average property tax payment rises in line with average incomes.
This is general information only and you should speak to a Financial Advisor about your specific scenario.
