Earlier this year, the New South Wales Government launched an exciting new scheme for first-home buyers in the state.
Those purchasing their first abode were once obliged to fork out for stamp duty up front. Now, though, they have the choice to pay a smaller yearly fee.
It’s an excellent development for NSW first home buyers and one we can’t wait to help some of our clients get on board with. If you’re a first home buyer and interested in our services, here’s everything you need to know about the scheme and what we can do to make your first purchase a great one.
What is the First Home Buyer Choice scheme?
The First Home Buyer Choice scheme is an initiative by the NSW Government. As part of the scheme, first-home buyers can either pay an upfront stamp duty payment or a smaller annual property tax on homes up to the value of $1.5 million.
Given stamp duty on a $1 million+ house can be well over $50,000 in NSW, this is quite a hefty saving. It could potentially reduce the time it takes to save for a deposit by several years.
How does it work?
Essentially, you need to decide whether to pay stamp duty or annual tax before your property settles. If you’re curious about which option you’re better off with, you can check out the NSW Government’s calculator or seek our assistance – but more on that shortly.
There are also a few criteria first home buyers need to meet:
You need to be an individual, not a company or trust
You need to be over 18
You or at least one other person you’re buying with have to be an Australian citizen or permanent resident
You or your spouse can’t have owned or co-owned residential property in Australia in the past
You or your spouse can’t have previously received a First Home Buyer Grant or duty concessions
The property has to be worth less or equal to $1.5 million
You have to move into the home within 12 months of buying it and then live in it for at least six months continuously
The contract of purchase must be signed on or after 11 November 2022
The First Home Buyer Choice scheme passed through parliament last year and officially came into effect on Monday, 16 January 2023. However, any first-home buyers who purchased their property after 11 November 2022 can request a refund on their stamp duty and switch over to yearly land tax.
It’s also worth noting that there aren’t any income limits on the First Home Buyer Choice scheme.
And where does Milk Chocolate come in?
If you’re a first home buyer who’s totally new to the Australian property market, we can help. We’ve worked with numerous property buyers to locate their dream home that meets both their lifestyle criteria and financial goals.
Planning
Milk Chocolate relies on a combination of on-the-ground know-how and smart tech tools to inform our property purchases. We look for locations that tick all your boxes – looking at things like proximity to work, friends and family, public transport, lifestyle and so on – but that also deliver financially.
If you intend to upgrade to a new home at a later date, we identify areas with strong capital growth. Down the line, this’ll mean making the most from your first property purchase to enable you to graduate to your second.
We can also help you navigate the ins and outs of the scheme. There are a few more complexities to the First Home Buyer Choice initiative, including its application to properties under a certain value and what to do if you want to eventually turn your home into an investment. As well, in some cases, stamp duty may be the better option. We do the legwork around the scheme’s finer details and financials, so you don’t have to.
Purchasing
Once we’ve found a location that meets your exact needs, we hand you over to our Purchasing team. We have a crew of expert buyers around the country who know the Aussie property market – as well as local markets – like the back of their hand.
This is where we look at the kind of first home you want to buy, be it an inner-city two-bedder or a country home. We consider your lifestyle needs, preferred aesthetic and budget, and present a range of properties to suit.
Then, we take you through the purchasing process – from making an offer or bidding right through to settling. We effectively bat on your behalf, acting as your representative from start to finish. We know how exciting it is to purchase your first home, so we make the journey as smooth, stress-free and satisfying as possible.
If you’re looking to purchase an investment property, expand your existing portfolio or find a family home, get in touch to discover how Brad and the Milk Chocolate team can help.
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