Are you keeping up with NSW stamp duty changes?
In January 2023, 2 months prior to the NSW elections, both major parties agreed that housing affordability, stamp duty, and tax reform were significant voter issues. So, it’s no surprise that the NSW Premier at the time, Dominic Perrotett (Liberal/National Coalition) announced a key reform ahead of the elections called First Home Buyer Choice (FHBC) scheme. The scheme allowed first homebuyers to choose between paying stamp duty or an annual property tax.
What are you entitled to under the NSW stamp duty changes?
Perrottet promised the scheme would help families in NSW access home ownership sooner, saying; “This national first will significantly reduce upfront costs, reduce the time needed to save for a deposit and will see most first home buyers pay less tax overall.”
The then Opposition Leader Chris Minns – now acting NSW Premier – criticised the plan as a “forever tax” and said it would be immediately repealed with a Labor government win. And Minns was true to his word, ending access to the scheme on 30th June 2023 and implementing his own changes to create the First Home Buyers Assistance Scheme (FHBAS). Let’s look at both schemes and what they mean for you.
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On the go? Here’s 30 seconds of take outs:
- The First Home Buyer Choice (FHBC) scheme allowed first home buyers to choose between paying stamp duty or a yearly land tax.
- FHBC was for homes worth up to $1.5m & ran from January ‘23 until 30th June ‘23.
- The First Home Buyers Assistance Scheme (FHBAS) started on 1st July ‘23.
- Under FHBAS, property tax is abolished, & properties under $800,000 are exempt from stamp duty for first home buyers.
- Plus, properties up to $1 million will have a reduced rate.
- FHBAS applies to buying an existing home, new homes & vacant land for building.
- Stamp (aka “transfer”) duty must be paid within 3 months of sale/transfer contract, except for off-the-plan – where it’s possible to defer up to 12 mths.
- No stamp duty applies if land value is less than $350,000. Above that concessional rates apply.
- See below for eligibility requirements & ADF exceptions.
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First Home Buyer Choice (FHBC)
The Coalition’s First Home Buyer Choice (FHBC) scheme, which ran from January 2023 until 30th June 2023, allowed up to 6000 new homeowners to choose between paying upfront stamp duty on homes worth up to $1.5m, or a yearly land tax. The land tax was calculated as a flat payment of $400 plus 0.3% of the property’s land value. For example, if the house valued at $1 million, first home buyers could choose to pay an upfront payment of stamp duty = $40,090 or an annual fee of about $2200.
And the government allowed people who’d just missed out on the deal (if they’d purchased their first house after 11th November 2022), to apply for a refund on their stamp duty and pay the annual fee instead. It’s believed that at least 2,500 people would have applied for the refund.
Who was eligible for the First Home Buyer Choice (FHBC) scheme?
The scheme was immediately popular with NSW first home buyers, more than 100 applicants a day in its first week. Although it’s hard to find the exact figure paid out in refunds, it was estimated that more than $1.28 million was paid out to the first 30 applicants.
The scheme was especially popular amongst buyers in Sydney’s outer suburbs, in particular Blacktown, Bayside and Parramatta as well as coastal regions where most properties were valued above $800,000.
First Home Buyers Assistance Scheme (FHBAS)
Under the existing Labor government, access to the First Home Buyer Choice (FHBC) scheme was closed off on 30th June 2023. Introducing instead the First Home Buyers Assistance Scheme (FHBAS). From 1st July 2023 the option to choose between property land tax and stamp duty would be no more. People who had taken advantage of the FHBC scheme are allowed to continue to pay property tax and will still be exempt from stamp duty for as long as they own the property.
These changes were implemented to create, Labor says, “a simpler, fairer system than FHBC, where first home buyers purchasing properties at the top of the range under the former government’s scheme received a disproportionate share of the benefits.”
Under the new scheme, the property tax is abolished, and any property purchased under $800,000 is exempt from stamp duty. Plus, any property purchased up to $1 million will have a reduced rate.
Note, in Labor communications, stamp duty is also sometimes referred to as “transfer duty”.
Figure 1: FHBC vs FHBAS – comparison of stamp duty savings
| Purchase price | Stamp duty under FHBC | Stamp duty under FHBAS | Savings |
| $700,000 | $10,363 | $0 | $10,363 |
| $750,000 | $20,727 | $0 | $20,727 |
| $800,000 | $31,090 | $0 | $31,090 |
| $850,000 | $33,340 | $10,023 | $23,318 |
| $900,000 | $35,590 | $20,045 | $15,545 |
| $950,000 | $37,840 | $30,068 | $7773 |
| $990,000 | $39,640 | $38,086 | $1555 |
What properties are eligible for the FHBAS?
The First Home Buyers Assistance scheme (FHBAS) applies when first home buyers are:
- buying an existing home
- buying a new home, and
- vacant land on which you intend to build a home.
When must you stamp duty/transfer duty be paid?
Stamp/Transfer duty must be paid within three months of signing the contract for sale or transfer, except in the case of off-the-plan purchases.
If you buy off-the-plan and you intend to live in the property, you may be able to defer your transfer duty liability for up to 12 months.
What if you’re building on vacant land?
If the land value is less than $350,000, you won’t need to pay stamp duty. For land valued between $350,000 and $450,000, you’ll receive a concessional rate.
If you exchanged contracts between 1st August 2020 and the 31st July 2021, the concessional rate is offered for land valued between $400,000 and $500,000.
Who’s eligible for the FHBAS?
- An individual (not a company or trust*) over 18 years of age who’s never owned or co-owned residential property in Australia or received an exemption or concession under this scheme.
- The first home buyer(s) must be an Australian citizen or permanent resident.
- There are requirements for living in the property for non-Australian Defence force members – increasing from 6 months to 12 months after purchase. However, ADF members won’t have to meet these (as long as everyone you’re buying with is on the NSW electoral roll).
*The Chief Commissioner could waive this requirement upon application. Contact Revenue NSW for more information.
As an ADF member, you may also be entitled to other home buying subsidies and incentives. We’ve discussed some of these in our previous blog post “Buying a house while in the Defence Force”.
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