The Property Tax (First Home Buyer Choice) Bill 2022 (NSW), proposes to give effect to the property tax reforms for first home buyers announced in the 2022-23 NSW Budget.
Under the proposed First Home Buyer Choice scheme, eligible first home buyers will have the choice of a smaller annual property payment or a traditional upfront payment for properties with a purchase price of up to $1.5 million. Occupation of the property must commence within 12 months of the first home buyer taking possession and must continue for at least 6 months. For people buying vacant land, with the intention of building their first home, the purchase price can be up to $800,000. Farmland will be excluded from the scheme.
For owner-occupiers, the initial property tax rates will be $400, plus 0.3% of the home's land value (as determined by the Valuer General). If a property tax dwelling is rented out, an initial investor rate of $1,500, plus 1.1% of land value, will apply. These tax rates will remain unchanged during the first 2 financial years of the scheme. From 2024-25, the tax rates will be indexed each year (but capped at a 4% maximum).
Date of effect: to eligible first home buyers if their purchase settles on or after 16 January 2023. An eligible first home buyer who buys a property between assent to the Bill and 15 January 2023 would still be required to pay stamp duty to complete their purchase. However, from 16 January they will be able to apply to opt in to property tax and receive a refund for any stamp duty paid.
© 2022 CPA Australia Ltd
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