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It will expand stamp duty exemptions which “is a fairer and simpler system”, says the government.
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NSW revamps tax concessions for first home buyers
23 May 2023
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10 minute read
The NSW Labor government has revoked the previous administration’s property tax alternative to stamp duty, the First Home Buyer Choice (FHBC) scheme, and announced an expanded concession system for first home buyers.
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Premier Chris Minns said he realised the stress associated with purchasing a first home and the struggle that came with it.
“I understand the stress of trying to purchase your first home. I want more singles, couples and families realising this dream,” said Premier Minns.
“Under Labor any property purchased under $800,000 will have absolutely no stamp duty, and any property purchased up to $1 million will have a reduced rate.”
“This is a fairer and simpler system to ensure more first home buyers have a chance of owning their first property.”
The government said it would introduce legislation into parliament to increase the First Home Buyers Assistance scheme threshold for stamp duty exemptions from $650,000 to $800,000 and concessions to rise from $800,000 to $1 million.
It said the changes would help 84 per cent of first home buyers and that those purchasing a property at $800,000 would save up to $31,090 while the expanded concessions would save those purchasing a $850,000 property over $20,000.
As part of the introduced legislation, there was also an increase in the amount of time first home buyers would be required to live in the home to be eligible for the benefits, rising from six months to 12 months in an effort that the government said would “improve the integrity and targeting of first home buyer assistance programs”.
The former administration's FHBC scheme would be closed off on Saturday 1 July, however, the Minns’ government said grandfathering provisions would be included so those that had opted into the annual property tax could continue to pay it until they sell the property.
NSW Treasurer Daniel Mookhey said the repealed scheme and revised legislation was a positive result for first home buyers.
“This delivers a key election commitment to abolish the tax, a forever tax on your home,” said Mr Mookhey.
“Now five out of every six first home buyers will get help to own the roof over their heads. It will benefit more first home buyers overall and more fairly goes to those who need it most.”
“The new thresholds for stamp duty exemptions and concessions are a simpler and fairer way to help more first home buyers than the property tax, which helped a smaller cohort of first home buyers.”
CPA Australia senior tax policy manager Elinor Kasapidis was critical of the NSW government and labelled the revocation of the property tax system a backwards step.
“The NSW government is taking a step backwards by stopping first home buyers from opting out of stamp duty. It’s pleasing to see the stamp duty thresholds increased in NSW but it’s not enough in the long run,” said Ms Kasapidis.
“CPA Australia wants governments to move away from inefficient taxes like stamp duty. There is a widespread agreement among tax professionals that stamp duty should be replaced with a smaller, annual fee for all home buyers.”
“We want a widespread national transition away from stamp duty. CPA Australia has been encouraging federal, state and territory governments to discuss stamp duty, GST and payroll tax reform. A shift away from stamp duty is overdue.”
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