Premier Dominic Perrottet said the First Home Buyer Choice would be a game-changer for first home buyers, “The great Australian dream of home ownership just got much easier for a generation of young families”.
From this weekend, and for the first time in Australia, first home buyers will be given the choice between paying a smaller annual property fee or a large upfront stamp duty on their first property. According to Premier Perrottet, this would result in thousands of people saving around two years off the time needed to save a deposit.
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Treasurer Matt Kean said “First Home Buyer Choice will significantly reduce upfront costs, reduce the time needed to save for a deposit and will see the majority of eligible first home buyers paying less tax overall,” Mr Kean said.
Grant Ryan, Director of Property and Research at Ironfish welcomed the historic move, “This is a significant boon for first home buyers in New South Wales, and will give them a real competitive edge over other buyers in the market as they now only need to save a deposit, whereas other buyers need to have enough funds for a deposit and stamp duty. This will allow more first home buyers to enter the market much sooner, and give them a more power in a competitive market.
With these changes, it is expected that there will be a surge in demand for property under $1.5m. This is likely to result in prices increasing – particularly for well located, quality properties. First home buyers should act quickly in order to secure quality properties before the anticipated influx of demand hits.
Will Mitchell, Head of Property at Ironfish remarked on the future implications of the legislation, “This change will be considered the first step in reforming the antiquated stamp duty system for all buyers in New South Wales. So, whilst First Home Buyers are the primary beneficiaries, investors should keep a keen eye on this space as it could leader to stronger demand, and ultimately stronger prices, should the stamp duty reforms be rolled out to all buyers.”
Whilst the property tax scheme is not be fully operational until January 16, first home owners who buy property this weekend can apply to seek a refund on their stamp duty and switch over to the annual tax option.
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