Six months after initially being proposed, New South Wales’ stamp duty reforms have passed the state parliament.
The law, which affords first home buyers the option between paying a smaller annual property fee or a large upfront stamp duty on their first property, was ratified on Thursday 10 November.
Premier Dominic Perrottet believes the changes will make “the great Australian dream of home ownership much easier for a generation of young families.”
Analysis by the NSW Treasury submitted to Parliament earlier this month revealed that two-thirds of first home buyers will opt against paying stamp duty with further research indicating that up to 80 per cent of home sales could benefit from the scheme.
“For the first time we will provide first home buyers with a choice, helping thousands of people to shave around two years off the time needed to save for a deposit,” the Premier said, adding that “people can now save huge sums of money on the biggest purchase of their life.”
Additionally, state Treasurer Matt Kean outlined that the new legislation would assist more young people enter the financial security that comes with homeownership by “significantly [reducing] the upfront costs, reduce the time needed to save for a deposit and will see the majority of eligible first home buyers paying less tax overall.”
“We are giving people the opportunity to decide for themselves what best suits their financial situation,” he said.
Angus Raine, executive chairman at Raine & Horne welcomed the changes, which he labelled as a “gamechanger.”
“Thousands of first home buyers will now be able to unlock the dream of home ownership sooner following the passage of this legislation that will allow them to choose between an annual property fee or an upfront stamp duty payment,” he said.
Mr Raine commended the NSW government’s changes for assisting more residents “get onto the property ladder faster – and better still, with First Home Buyer Choice, there are no income caps on eligibility.”
However, the industry sentiment has not been all positive towards the latest legislation.
Property Council of Australia’s acting NSW executive director, Adina Cirson said the group is “disappointed there is no inbuilt review of the reform to ensure there is no increase in cost of housing development and it does not result in a disproportionate impact on other parts of the property sector as has been experienced in the ACT over the last ten years.”
First home buyers will be available to access the scheme from Saturday 12 November, however, these buyers will be required to pay stamp duty on purchases made until 15 January 2023. From that point, they will be able to apply for a refund of their stamp duty should they choose to opt into the scheme.
From 16 January 2023, eligible buyers can opt directly into the annual fee without being required to fork out stamp duty.
First Home Buyer Choice will be available for dwellings costing up to $1.5 million, while for the purchase of vacant land intended for the construction of a first home, the price cap will be up to $800,000.
Over the next four years, the NSW government has allocated $728.6 million to the First Home Buyer Choice scheme.