New South Wales Treasurer Matt Kean has announced a major proposed change to transfer duty for first home buyers in the State Budget. Read on to find out all the implications of the proposed change, as well as the answers to FAQs.
What is transfer duty?
Transfer duty is an upfront government payment that most buyers must pay when buying property. It is a fee for a property’s legal title being transferred from the seller. It used to be called stamp duty.
Transfer duty applies to residential, investment and commercial properties, including vacant land.
How much is transfer duty now?
The transfer duty amount is based on the property’s purchase price or its current value, whichever is higher.
Different rates currently apply depending on whether you are:
- buying a residential or investment property.
- a first home buyer.
- buying an existing or new home.
- a foreign purchaser.
You can use our NSW transfer duty calculator to work out how much you would currently pay to buy a New South Wales property.
What is the proposed change?
The NSW government has proposed that home buyers will be able to opt for a smaller annual property tax ($400 plus 0.3% of the land value) in lieu of paying a large upfront transfer duty. The property being purchased must be valued at under $1.5 million to be eligible for the annual property tax scheme.
Currently, first home buyers who buy a home valued at less than $650,000 are exempt from transfer duty, and those buying properties valued between $650,000 and $800,000 pay a reduced rate. These concessions will remain in place.
What are the implications of the proposed change?
The proposed change will make buying a property more affordable for first home buyers who choose to opt in to paying the annual property tax rather than paying upfront stamp duty.
“It will mean more NSW residents will get into their first home at an earlier age and achieve the great Australian dream of home ownership,” Matt Kean said when announcing the scheme.
When will the proposed change take effect?
The proposed change will have to be passed in parliament before it becomes law. The Perrottet government are hoping that the legislation will be passed by January 2023.
How we can help
If you’re a first home buyer looking to buy a residential or investment property in the Newcastle, Maitland and Lake Macquarie areas and you need finance, talk to us. Our licensed and experienced brokers at Wisebuy Investment Group will take the time to find out your individual needs. We will then match you with a suitable lender and help you to get the right loan.
We work with more than 60 lenders in the Australian market, and we can help you with your loan application. Importantly, we work for property buyers, not lenders.
Contact us today for an obligation-free chat to find out more. We’d be happy to answer any questions you have and to explore your finance options with you.