Changes to Stamp Duty in the 2023-2024 NSW Budget
From 1 July 2023, the New South Wales Labour Government changed the thresholds for the exemption from payment of stamp duty for new and existing homes and the time periods in which purchasers have to live in the property. The changes are outlined below, but if you have any further questions, please do not hesitate to contact the CDQ Property and Conveyancing team.
First Home Buyer Assistance Scheme
Under the First Home Buyer Assistance Scheme (FHBAS), eligible first home purchasers who buy a new or existing home for $800,000 or less will now be exempt from the payment of stamp duty. This has increased from $650,000.
There are also concessions which apply for the payment of stamp duty on properties purchased between $800,000 and $1,000,000, after which normal stamp duty rates apply. This has increased from between $650,000 and $800,000.
The stamp duty thresholds for vacant land will remain unchanged. Eligible first home purchasers who buy vacant land for $350,000 or less will be exempt from the payment of stamp duty. There are also concessions which apply for the payment of stamp duty between $350,000 and $450,000, after which normal stamp duty rates apply.
The other change to the FHBAS, for contracts exchanged on or after 1 July 2023, is a requirement for the purchaser to move into the property within 12 months of the date of settlement of the purchase and to live in the property for a continuous period of 12 months. Previously this was a continuous period of 6 months.
Who is Eligible for the FHBAS?
To be eligible for the First Home Buyers Assistance Scheme, the following conditions must be met:
- the purchase must be for a new or existing home, or vacant land in NSW
- the property value must be within the threshold amounts
- the transfer must be for the whole property
- you must be an individual, (not a company or trust*)
- you must be over 18*
- you and your spouse or partner, must never have owned or co-owned residential property in Australia
- you and your spouse or partner, must never have previously received an exemption or concession under the scheme
- at least one of the first home buyers must be an Australian citizen or permanent resident
- for new or existing homes, you must meet the requirements for living in the property (that is, living in the property for a continuous period of 12 months).
What does this new Scheme mean for first home buyers?
The aim of the new FHBAS is to make stamp duty ‘fairer’. It means that many first home buyers will save thousands of dollars on stamp duty and in some cases – particularly when buyers are purchasing properties in regional centres – they will actually be able to avoid paying stamp duty altogether.
Can first home buyers still choose to pay annual property tax instead of samp duty?
The previous NSW Liberal government’s stamp duty reform was known as the First Home Buyers Choice Scheme. Under this Scheme, you could elect to pay an annual property tax payment in lieu of stamp duty. This Scheme was closed from 1 July 2023 following the current Labour government’s election win.
Importantly, anyone who purchased a property under the First Home Buyers Choice Scheme and opted into the scheme before 1 July 2023 will continue to pay the property tax during their ownership of that property.
How do you apply for the FHBAS?
Once you have exchanged contracts on your property purchase, you can apply for assistance through the NSW Revenue website.
The application forms are completed online and must also be lodged with the solicitor or conveyancer who is acting on your behalf in the purchase. The team at CDQ can provide assistance with your application and work through the process with you during the purchase of your property.
For more information on purchasing a property and associated stamp duty requirements, contact the Property and Conveyancing team at CDQ Solicitors on ph: (02) 8566 0130.
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