The state government of New South Wales has launched an online calculator that will help first-time buyers compare their options under the First Home Buyer Choice scheme.
The First Home Buyer Choice scheme allows first-home buyers to choose whether to pay for an upfront stamp duty or pay a $400 annual fee plus 0.3% of the land’s value when they purchase a property.
The scheme aims to help reduce the upfront costs of buying a property in the state and is expected to support about 97% of all first-home buyers or about 55,000 people annually.
The calculator, which can be accessed through the Service NSW website, provides a detailed comparison of the options available for first-home buyers.
To use the calculator, users only need to input the purchase price and the intended property address.
Here’s a sample calculation: a $725,000 house for sale in the suburb of Oakwood would require first-home buyers to pay for either of the following:
- An annual property tax of $796, based on the land value of $132,000.
- An upfront stamp duty of $15,545 (calculated at a reduced rate under the First Home Buyers Assistance Scheme).
Applicant eligibility for the First Home Buyer Choice scheme
While anyone can use the calculator, interested parties must meet the following requirements to be eligible for the scheme:
- They must be an individual (not a company or trust) aged at least 18.
- The applicants or one of the applicants if they are buying together must be an Australian citizen or a permanent resident.
- The applicant and their spouse must not have previously owned or co-owned a residential property in Australia.
- Interested parties must not have previously received a First Home Buyer Grant or a duty concession.
Which properties are eligible under the First Home Buyer Choice scheme
Applicants must also meet the property specifications to be able to avail the benefits of the scheme.
The property must meet the following:
- It must be a house, townhouse, strata unit, company title unit, flat, duplex or a vacant block of residential land intended as the site of a first home.
- It must not include a business or business premises.
- It must not be on the site of a holiday home.
- The value of the property must no exceed $1.5m. For vacant land, the value must not go over $800,000.
Once approved, the applicant must move into the property within 12 months of purchase and live in it continuously for at least six months.
When will the First Home Buyer Choice scheme commence?
Applications for the initiative will be open starting 16 January 2023 — by this time, first-home buyers can opt-in to property tax instead of paying for stamp duty upfront.
Buyers who are buying a property from someone who is paying land tax will not be subject to the same scheme unless they are also first-home buyers and are planning to apply for the scheme.
—
Photo by towfiqu barbhuiya on Canva
Collections: Mortgage News Stamp Duty
Share