Eligible first home buyers who exchanged contracts from 11 November 2022 on properties valued up to $1.5 million can now choose to pay an annual property tax instead of transfer duty.
For properties settling on or before 15 January 2023, purchasers pay transfer duty and apply for a refund after 16 January 2023.
Settlements occurring after 16 January 2023 do not require transfer duty to be paid if the property tax option is chosen.
The Property Tax (First Home Buyer Choice) Act 2022 (NSW) received assent on 11 November 2022.
The existing first home buyer duty concessions still apply.
The property tax is indexed annually, capped at 4% per year.
Eligible first home buyers who are not Australian citizens can still be liable for surcharge purchaser duty, even after opting into the property tax.
A residence requirement of 6 continuous months within the 12 months after settlement applies. Purchasers who then use the property as an investment face a higher rate of property tax.
See the By Lawyers Conveyancing (NSW) guides and the Revenue NSW website for more information.