FIRST HOME BUYER INCENTIVES IN NSW ARE CHANGING AGAIN
The recent change of government in NSW has brought in a new direction for incentives that will be avaialble for first home buyers.
It was only several months ago that the previous NSW government introduced The First Home Buyers Choice initiative (FHBC). This scheme allowed first home buyers to make a choice about whether they pay transfer duty in full as a lump sum payment, apply for a concession or apply to have a yearly land tax applied in place of the one-off transfer duty lump sum.
The new government has propsed that it will close off access to the FHBC scheme from 01 Juyl 2023 for new applicants, while existing first home buyers who opted into the FHBC scheme will have grandfathering provisions apply to their property choice tax. What these grandfathering provisions will look like is presently unclear.
The new legislation soon to be introduced in parlaiment will raise the threshold for stamp duty exemptions that are currently in place under the existing First Home Buyers Assistance Scheme (FHBAS) from $650,000 to $800,000. The transfer duty concession will be increased from $800,000 to $1,000,000.
This will mean that more first home buyers will be able to take advantage of paying no transfer duty at all if they are able to buy their first home for under $800,000 and they will pay reduced transfer duty when purchasing a property for up to $1,000,000.
The changes will also affect the residence requirement for those who apply for the transfer duty exemption or concession. Currently, the first home buyer must live in the property for at least 6 months in the first 12 months of ownership. This residence requirement will now be increased to require purchasers to reside in the premises for at least 12 months immediatley after purchase. This means that those looking to purchase thier first home to live in for 6 months and use it as an investment property will now have to wait an additional 6 months before they can proceed in this way.
If the purchasers do not meet these requirements, Revenue NSW can require payment of the duty the purchasers would have been liable for had they not been approved for the exemption or concession.
It is anticipated the changes to the FHBAS will commence on 01 July 2023.