First Home Buyers Choice

First home buyers in NSW can now choose between paying upfront stamp duty or pay an annual property tax. 

The NSW government has launched First Home Buyer Choice as a way of helping first home buyers get into the market sooner.

The scheme lets you choose between paying pay stamp duty on your first home, or paying an annual property tax.

The must-knows

First home buyers can already pay zero stamp duty if they buy a home or vacant land below certain values.

As the table below shows, if you buy a new or established home for less than $650,000, or vacant land priced below $350,000, you pay no stamp duty at all. This doesn’t change under First Home Buyer Choice.
What if I can’t find a home priced below these values?

That’s where First Home Buyer Choice comes in.

The scheme is designed to make it easier for first home buyers to get into the market by paying a smaller annual property tax instead of waiting to save the cost of stamp duty.

It’s a step the NSW State Government estimates can cut two years off the time taken to save for a home.

How much annual property tax will I pay?

The annual property tax that applies under First Home Buyer Choice is calculated on the land value of your home. The tax rate for both 2022-23 and 2023-24 is $400 plus 0.3% of land value. From 2024/25 the tax rate will be indexed each year in line with average annual incomes.

Unlike stamp duty, which is a one-off cost, the property tax will apply every year that you continue to live in the home.

Home loan lenders are likely to include the annual property tax in your household expenses when they determine your eligibility for a home loan, and how much you can borrow.

Am I eligible for First Home Buyer Choice?

Eligibility for First Home Buyer Choice is not based on income, but you must be:
  • Aged over 18
  • An Australian citizen or permanent resident
  • Buying your first home as an individual (not a company or trust)
  • A first home buyer who has not previously owned residential property in Australia or received a First Home Buyer Grant or duty concessions
  • Sign the agreement for sale or transfer of land on or after the initiative commencement date.
Once you buy a home, you need to move in within 12 months of purchase, and live there for at least six consecutive months.

First Home Buyer Choice is only available on properties priced up to $1.5 million.

Stamp duty versus property tax – which will save me more?

To decide if paying an annual property tax works out to be cheaper than paying stamp duty, head to the online calculator at Service NSW. You’ll need to enter the address of the property you’re looking at as the property tax is based on land value.

Ready for more research?

For an idea of costs you might be up for when buying your first home, check out our buying and selling costs calculator.

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