What is it? Why is it important?
The New South Wales Government has recently announced their ‘First Home Buyer Choice’ initiative in efforts to boost home ownership state-wide. This scheme offers first home buyers a greater choice between paying an annual property tax or stamp duty (transfer duty), ultimately aimed at reducing upfront costs.
The new approach to property tax
Under this scheme, property tax will be determined by a property’s unimproved land value. Accordingly, annual owner-occupier property tax rates will be set at $400 plus 0.3 percent of the property’s unimproved land value in 2022-23.
First home buyers will now be able to change the status of a property from owner-occupied to a residential investment property. Property tax for residential investors will be set at $1500 plus 1.1 percent of the property’s unimproved value in 2022-23.
Does this apply to subsequent purchases?
Stamp duty will still apply as a default for subsequent purchases, unless the purchaser is an eligible first home buyer who chooses the property tax route.
What about non-first home buyers?
Non-first home buyers are not included in this initiative and remain liable for stamp duty without the choice to opt for the alternative property tax.
Who is eligible for the First Home Buyer Choice initiative?
Eligibility for the First Home Buyer Choice initiative requires that the purchaser is an individual (rather than a company or trust) and is over 18 years of age. If these are not satisfied, then it is required that at least one of the co-purchasers is an Australian citizen or permanent resident, or, that the purchaser's spouse has not previously owned residential property in Australia and has not previously received a First Home Buyer Grant or any duty concessions.
In addition to these criteria, the property being purchased must be of equal or less value to $1.5 million. The purchaser is required to move into the property within 12 months and live at that address for at minimum of 6 continuous months. Finally, the purchaser must sign the contract either on, or after, the start of the First Home Buyer Choice scheme date.
When will it come into effect?
The First Home Buyer Choice scheme will begin on the 16th of January 2023, meaning all purchases on or after this date will be eligible under the scheme. Additionally, contracts signed between the 19th of May 2022, being the passage of legislation, and the 15th of January 2023, will also be eligible.
It is important to note that all purchasers will be required to pay any required stamp duty within the standard periods. However, from the 16th of January 2023, purchasers can apply for a refund of the stamp duty.
Meet the Team
Emmanuel Penglis - Solicitor
Emmanuel joins Moustacas & Co Lawyers offering a wealth of Intellectual Property (IP) experience. During Emmanuel’s 10+ years of IP experience he has worked on high profile IP litigation matters and numerous trade mark prosecutions in Australia and internationally. Emmanuel has worked for multinational law firms, in-house and most recently with IP Australia. Aside from law Emmanuel is an avid traveller, fitness enthusiast and lover of all things Star Wars, Marvel and US sports.
Emmanuel is unashamedly known for having a positive, can-do attitude that seeks to achieve the most out of each day and interaction. Emmanuel’s passion is being able to achieve the best for his clients and their success is what brings joy to what he does everyday.
Emmanuel’s experience includes:
protecting the trade mark of a well-known Australian skincare brand in over 120 countries
protecting the celebrity name of a well-known Australian supermodel
opposing and defending multiple trade mark applications at IP Australia
enforcing and protecting the IP rights of some Australia’s beloved beer brands and breweries
Memberships:
Law Society of New South Wales
Intellectual Property Society of Australia and New Zealand (IPSANZ)
Buying or Selling?
If you are thinking of selling your property, please contact us to talk through preparing a contract. Our team are always available for any questions you may have regarding the selling process.
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Contact us on 02 9387 6866 for all your Conveyancing, Wills and Estates or Intellectual Property needs.