NSW First Home Buyer Choice
The NSW Government now provides first home buyers purchasing properties for up to $1.5 million the ability to choose to pay an annual property tax instead of stamp duty.
Key points
Changes to the NSW property tax system give first home buyers a choice:
- Stamp duty for first home buyers in NSW can be paid upfront, or
- Pay property tax every year until the property is sold.
Summary of the main changes for the 2023 year include:
- Land tax threshold increases to $969,000
| Tax year | General threshold | Premium threshold |
|---|---|---|
| 2023 | $969,000 | $5,925,000 |
| 2022 | $822,000 | $5,026,000 |
- Foreign Owner surcharge increases to 4%. From the 2023 land tax year, the surcharge land tax payable on residential land owned by foreign persons increases from 2% to 4% of the taxable value of the residential land owned at midnight on 31 December 2022
- Early payment discount reduced. From the 2023 land tax year, the discount for early payment of land tax reduces from 1.3% to 0.5%.
The property tax will only be payable by first home buyers who choose it, and will not apply to subsequent purchasers of a property.
The savings required to meet the up-front costs of a home purchase are an important barrier for many would-be purchasers. Removing the obligation to pay stamp duty is intended to lower these up-front costs and cut up to two years off the time needed by many first home buyers to save for a home. This initiative is designed to lower the up-front costs of home purchases and help to boost the rate of home ownership in NSW.
Existing stamp duty concessions for first home buyers are available for purchases of up to $800,000, and these concessions will continue. The property tax option will be available for properties for up to $1.5 million, helping a broader group to become first home buyers.