Buying a home for the first time can be a challenging endeavor, but fortunately, there are various government benefits available to assist first home buyers in entering the market. However, with changes to these initiatives expected from 1st July, the time to find your new home is now.
Two notable schemes that provide support to first-time buyers are the First Home Buyer Assistance Scheme and the First Home Buyer Choice.
How does the First Home Buyer Assistance Scheme work?
The First Home Buyer Assistance Scheme operates by offering eligible individuals the opportunity to apply for an exemption or a concessional stamp duty rate. This means that they may be able to avoid paying the full amount of stamp duty when purchasing their new home.
Under this scheme, if the value of your new home is less than $650,000, you can apply for a full exemption, thereby eliminating the need to pay any stamp duty. For new homes valued between $650,000 and $800,000, you can still benefit from the scheme by applying for a concessional stamp duty rate, which will be determined based on the value of your home.
How does First Home Buyer Choice work?
First Home Buyer Choice operates by offering eligible first-time homebuyers the option to pay a reduced annual property tax instead of traditional stamp duty. The program aims to alleviate the financial burden associated with purchasing your first property by reducing the upfront costs. It is available for properties priced up to $1.5 million.
How is property tax calculated?
Property tax is calculated using the land value of the property.
The current property tax rates for 2022-23 are:
- Owner-occupiers: $400 + 0.3 per cent of the land value.
- Residential investors: $1,500 + 1.1 per cent of the land value.
What does this mean for you?*
Simply put if you were to purchase Unit 207 in Lacebark for $675,000# as an eligible first home buyer you’d have the option to take advantage of:
First Home Buyer Assistance Scheme
Pay just $5,182 of stamp duty upfront.
Saving you $20,283.33.
Annual Property Tax
Pay approximately $581 per year
for the years you live in the property
Who is eligible for First Home Buyer Initiatives?
You will need to meet the following criteria to be an eligible for first home buyer, according to Revenue NSW:
- Be an individual (not a company or trust) aged above 18
- Be an Australian citizen or permanent resident
- You (and the person you are purchasing with) have not owned or co-owned a residential property in Australia before
- You must also move into the property within 12 months, and live there for at least six continuous months.
To learn more about how you can take advantage of these schemes book an appointment and visit the Sales Team at the Mulpha Sales and Experience Centre today.
*The example is intended as a guide, to provide an estimate of the property tax that would be payable on a particular property, supposing it is owned for all of the current financial year. The estimate of transfer (stamp) duty depends on the estimate of the purchase price. The duty payable will depend on the actual purchase price. The choice between paying transfer (stamp) duty or property tax will depend on your individual circumstances. If you meet the eligibility rules and you choose property tax, it will remain payable each year until the property is sold or a relevant transaction occurs.
#Price correct as of June 2023 and subject to change
Source: https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer
https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/first-home-buyer-choice