One of the biggest barriers to home ownership for tens of thousands of NSW first home buyers has been swept away by landmark reforms that eliminate oppressive upfront transfer payments (Stamp Duty) for new buyers.
The First Home Buyer Choice scheme, which has now commenced, provides first home buyers the option to either pay the traditional upfront transfer duty (previously known as stamp duty) or smaller payment made each year.
“This reform will not only help first home buyers get the keys to their home sooner, but will also result in many first home buyers paying less overall,” said the NSW Treasurer Matt Kean.
The scheme has now opened to first home buyers who have acquired a property or have signed an off-plan-plan purchase contract worth up to $1.5 million.
The watershed reform is forecast to slash as much as two years off the time it takes the typical NSW household to save up for a deposit on a home, and modeling shows 97 percent of first buyers – around 55,000 people every year – will be eligible.
Instead of paying an onerous stamp duty lump sum payment, which is calculated on the cost of the entire purchase price, first buyers can now opt to pay an annual amount of just $400 plus 0.3 percent of the value of the land (including for apartment).
For someone buying an apartment for $800,000, the upfront stamp duty payment would be $31,090, while the annual property tax would be $880 a year (based on land value of $160,000). It would take well over 30 years of property taxes, based on present value terms, for homebuyers to pay more than they would in stamp duty.
Apart from reducing the upfront cost of a property for first home buyers, CoreLogic’s Head of Residential Research Eliza Owen noted an annual property tax made property more “efficient”.
“By taxing households on land on an ongoing basis, and removing the transaction barrier of stamp duty, it is thought that people will be more incentivised to buy the housing that is right for them in their current stage of life,” she said.
The introduction of the First Home Buyer Choice Scheme follows a raft of other Federal and NSW Government initiatives, which are providing an unprecedented level of support for first home buyers.
These include the First Home Guarantee Scheme that makes it possible for thousands of buyers to acquire a property with a deposit as low as just two percent, plus shared equity schemes that substantially reduce the financial burden for many first-time purchasers, the dismantling of stamp duty mean there has never been an easier time to enter the market.
Deicorp currently has more than 800 apartments available in highly sought-after locations that are all priced within the First Home Buyer Choice scheme thresholds.
With several more exciting developments on the way in popular locations across Sydney, that number is set to grow. The Deicorp team is currently hard at work on major projects that will deliver 600 apartments in Hassall Street, Parramatta, 550 apartments at Joynton Avenue, Zetland, and 212 apartments at Marquet Street, Rhodes. Deicorp’s pipeline also includes another transport-connected precinct with nearly 500 apartments and 30,000 square metres of retail space at Melrose Park. These fantastic ventures are contributing to a pipeline that will deliver an extra 2,500 apartments over the next few years.
“People who’ve spent years carefully saving up to buy their own slice of one of the world’s most robust and resilient property markets are now a lot closer to achieving their dream,” Nick Hunter, Group Head of Sales for Deicorp said.
“Getting rid of stamp duty will help to unlock a cornerstone of modern life in Australia for countless young families and other people who are eager to have an apartment they can call their own, where they can put down roots and become part of a community.”
