The First Home Buyer Choice program of the previous Liberal government in NSW is expected to be replaced by Labor’s Fresh Start plan on 1 July. The Fresh Start plan offers full exemptions from stamp duty for first-home buyers purchasing homes worth $800,000 or less, but with lower house price caps. Potential first-home buyers in NSW have three options:
- choose the stamp duty or
- annual land tax option under the First Home Buyer Choice program,
- or wait until 1 July and purchase under the Fresh Start plan.
Coming to a decision can be complex when considering all the factors, but it is feasible to establish some guidelines.
- Generally, if the purchase price is under $650K, buying at any time is acceptable.
- For prices ranging from $650K to $800K, waiting until after 1 July is advisable as no stamp duty will be charged.
- If the price falls between $800K and $850K, it is best to wait until July.
- For properties priced between $850K and $950K, it is recommended to buy a unit now and opt for the NSW property tax, but for a house, waiting may be more beneficial. The optimal choice varies depending on how long the property will be kept, as paying more in property tax than stamp duty may be more cost-effective in the long run.
- For prices ranging from $950K to $1.5M, it is almost certainly better to buy now and choose the property tax if planning to keep the home for an average of 10 years. However, it may be better to wait if the property is intended to be kept indefinitely.
How Long Does The Average Person Keep Their Property?
According to a source, the average length of time people keep a house is approximately 11 years, while for a unit it is about 9.5 years. It is important to consider whether you are purchasing a permanent residence or if you may need to upgrade or downsize in the future. The following chart compares the cost of stamp duty if paid upfront before July 1, 2023, the option of choosing annual property tax if purchased before July 1, 2023, and the proposed scheme by the NSW Labor government if purchased after July 1, 2023.