The clock is ticking if you’re a first home buyer hoping to take advantage of the First Home Buyer Choice scheme to break into the market.
This scheme was brought in by the former Coalition state government to lower the upfront costs of purchasing property, by giving first home buyers the option of paying a smaller annual property tax rather than stamp duty when buying a home worth up to $1.5 million.
However, this is all set to change following Labor’s recent win in the state election. That’s because, during the campaign, Labor promised to scrap First Home Buyer Choice in favour of increasing stamp duty exemption and concession thresholds.
Under Labor’s plans, eligible first home buyers will:
- Pay no stamp duty when buying properties worth up to $800,000 (currently $650,000)
- Pay a discounted rate for homes up to $1 million (currently $800,000)
Increasing these thresholds should mean around 95% of all NSW first home buyers will pay no tax or a reduced rate because of these changes, according to independent modelling by the Parliamentary Budget Office.
While there’s no date as yet as to when this new policy will take effect, it’s likely to be close to the new financial year on 1 July 2023. First home buyers who opt out of stamp duty before First Home Buyer Choice is abolished will continue to pay the annual property tax while they own the home.
Labor’s other housing reforms
During the campaign, Labor promised to boost housing supply, particularly in the regions. The government plans to do this by:
- Cutting red tape and streamlining the planning process by centralising all decision-making responsibilities (other than local government) under the planning minister
- Setting new housing targets matched to population growth and infrastructure requirements, especially around metro lines
- Introducing a mandatory requirement for 30% of all homes built on surplus government land to be set aside for social, affordable and universal housing
- Launching a $30 million pilot build-to-rent project on the South Coast with 30% of properties allocated for social, affordable and universal housing.
Labor’s rental platform included:
- Establishing a rental commissioner, who will advocate for tenants and identify ways of making renting fairer and more affordable
- Banning secret rent bidding by making sure any offers above the listed price are disclosed to the other applicants
- Introducing a bond-portability scheme, making it possible for renters to transfer a bond from one property to another
- Making it easier for tenants to have pets in rentals
First home buyer looking to break into the property market? Just Imagine Finance can help you make the most of federal and state government incentives. To discuss your options, contact us on firstname.lastname@example.org or 0414 673 359.