The 2022-23 state budget has introduced a housing package called the First Home Buyer Choice to make home ownership “more achievable”.
The scheme means first home buyers will be able to opt in for an annual $400 property tax plus a percentage of the land’s value instead of a lump sum payment.
This new option is available for homes worth up to $1.5 million.
For example, a first home buyer purchasing an apartment in Sydney for $830,000 with a land value of $265,000 will have the choice between paying an upfront stamp duty of $32,440 or an initial property tax of $1195.
First home buyers are already exempt from paying stamp duty on homes up to $650,000 under existing government schemes.
NSW Premier Dominic Perrottet said the government wants to “lower the barriers” for first home buyers to have a place of their own.
“The First Home Buyer Choice will remove one of the largest upfront costs to buying a home and help deliver a brighter future for first home buyers,” Perrottet said.
Treasurer Matt Kean said this historic reform will allow more young people to get a foot in the door for home ownership.
“We know that first home buyers are being forced to enter the property market later in life and this reform will make the property market more accessible for them,” he said.
“It will mean more New South Wales residents will get into their first home at an earlier age and achieve the great Australian dream of home ownership.”
The scheme will be rolled out from January 16 next year with the government looking to enact the legislation later this year.
However, if you buy your first home between when the legislation is enacted and January 15 next year then you can receive a full refund on your stamp duty payment.
One of the key government investments this year is first home buyers, with a $2.8 billion housing package which includes the stamp duty reform and the previously announced shared equity scheme.
The shared equity scheme, which is expected to hit the budget at more than $780 million, includes support for single parents, older singles and frontline workers like nurses and police to buy a home under the trial.
The government will contribute 40 per cent for new homes and 30 per cent for existing homes under $950,000.
Over the next two years, 3000 people will be eligible for the trial program.
The state government also plans to upgrade more than 15,000 social homes to ensure they are “suitable for ageing and less mobile residents” in a $300 million investment.