Save thousands on your home loan
Compare 25+ lenders and hundreds of loans in an instant
I want:
Westpac Macquarie citibank commonwealth bank anz bankwest
finni mortgages logo
google reviews
4.9
star star star star star
Rating based on 147 reviews

×

Reminder: NSW’s new stamp duty scheme kicks off on 1 July

03 JUL 2023 By Kyle Robbins 3 min read Finance

They were promised during Chris Minns’ election campaign and now the state’s updated stamp duty provisions have come into effect.

chris minns Apr2023 spi v1xfti

Under the scheme, promised by the Premier back in January, New South Wales’ stamp duty free threshold will increase from the $650,000 mark introduced by former premier Dominic Perrottet last year to $800,000 while the threshold for stamp duty concession will rise $200,000 to $1 million.

Despite stamp duty’s position as one of the most controversial taxes in the Australian property atmosphere, Mr Minns has previously stated that his scheme is “by far a better use of taxpayer money”. He stressed it would benefit “tens of thousands of people [who] are far better off under Labor’s proposal”.

You’re out of free articles for this month

Unlike the outgoing Liberal government’s scheme, Labor’s updated First Home Buyers Assistance Scheme (FHBS) doesn’t not afford first home buyers the chance to replace stamp duty with a yearly land tax.

The Liberal government’s scheme closed on Friday (30 June), with a media statement from the NSW government explaining “buyers who opted in [to the scheme] will continue to pay property tax until they sell that property”.

State treasurer, Daniel Mookhey, said the beginning of the new financial year would “be a great day for thousands of extra first home buyers who will now pay zero stamp duty on their first home purchase”.

According to the treasurer, five in every six first home buyers won’t have to cough up stamp duty under the changes.

Taking a shot at the Perrottet government, Mr Mookhey insisted Labor’s scheme “ensures first home buyer assistance in NSW is simpler and fairer”, before adding it would provide significant support to those who need it most.

According to calculations provided by the state government, under the new FHBAS, first home buyers purchasing are nearly $31,000 better off than they would’ve been under the Liberal system.

Casting a gaze above the stamp duty free threshold, properties purchased for $850,000 – which would’ve cost their new owners nearly $33,000 under the old scheme – would only require a stamp duty payment of $9,934, ultimately resulting in savings of around $23,000.

The Premier expects approximately 8,600 first home buyers purchasing in the $650,000 to $800,000 range to pay no stamp duty over the next year, with this figure dwindling to 4,400 for those buyers entering the market for the first time between the $800,000 and $1 million range that will be stung with the concessional rate.

The Minns government’s decision to abolish the Liberal government’s yearly land tax wasn’t met with the widespread jubilation many would expect.

Elinor Kasapidis, CPA Australia’s senior tax policy manager, believes “it’s clear from the significant uptake of the property tax option that there is demand for this alternative in NSW”.

From the moment the Liberal government’s land tax scheme was offered in January to the beginning of March, approximately 1,000 people opted into it, highlighting its appeal.

Loading form...

While she insisted increasing stamp duty exemption thresholds are a step in the right direction she stressed “it’s not enough in the long run”.

Doubling down on the position of CPA and the wider Australian taxation community, she explained governments need to transition from “inefficient taxes like stamp duty” and implement what is widely agreed by tax experts and professionals as the better system – “smaller, annual fees for home owners”.

Tags:
You need to be a member to post comments. Become a member for free today!

Related articles