Buying a new home with stamp duty adds approximately fourty thousand dollars for every million you spend, due upfront with all other costs associated with procuring your new abode.
A new option introduced is an alternative property tax that allows home buyers to average out their stamp duty, giving an additional amount to spend on better digs or location choices while pain-soothing the initial layout needed for first home buyers attempting to get into Australia's housing market.
Tuesday night’s NSW budget confirmed first home buyers could pay property tax on homes up to $1.5 million with an annual $400 fee plus 0.3 per cent tax on the value of your land.
The new legislation will create a property tax to begin in the second half of 2022, and first-home buyers can apply from mid-January 2023.
Renters entering the housing market for the first time will find the process easier when securing funding. Without the need to have the additional stamp duty ready to go, it removes a significant barrier to entering the Australian residential marketplace.
Dominic Perrottet’s housing reforms give NSW first home buyers an option of paying annual tax over the customary stamp duty on a property valued up to $1.5 million.
“We want to lower the barriers to owning a home for first-home buyers seeking a place of their own; in the past two decades, the share of first-home buyers under 35 years of age has declined from 67 per cent to 61 per cent.
Lifting home ownership is part of this government’s efforts and ambition to help families who are feeling the squeeze.
The First Home Buyer Choice will remove one of the largest upfront costs to buying a home and help deliver a brighter future for first home buyers.”
The cut-off price for an exemption of stamp duty or tax is $650,000 if you want to alleviate the additional expense.
First home buyers taking up a mortgage on a 5 per cent deposit will welcome the choice to spread out their costs over the loan and increase their initial buy amount options on properties selling over $650k.
If you’re obtaining a pre-approval for a home loan, the new tax option gives buyers a few extra dollars for a final competitive bid and added spending to assist in owning the home of your dreams. Tax is due through additional instalments over the term of the loan.
Properties will not be locked into the tax scheme once sold.
Stamp duty costs compared to the number of years it could take to accrue the same in property tax.
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