At the end of 2022, the government implemented the First Home Buyer Choice (FHBC) which provided eligible first home buyers who purchased properties for up to $1.5 million the choice to pay an annual property tax instead of transfer duty. This applied to contracts that exchanged on or after 11 November 2022.
Recently the government announced that they are abolishing the FHBC. Contracts exchanged on or after 1 July 2023 will not be provided the choice to opt into the annual property tax. This means that if you are an eligible first home buyer and you entered into a contract prior to 1 July 2023 then you have until settlement to opt into the FHBC. Eligible purchasers that have opted into the FHBC will continue to receive their annual property tax notice each year that they are the registered proprietor of the property.
For contracts that exchange on or after 1 July 2023, the First Home Buyers Assistance Scheme (FHBAS) has been expanded. Eligible first home buyers will receive an exemption from transfer duty for purchases of new and existing homes up to $800,000 and a concessional rate of duty for new and existing homes up to $1,000,000. The threshold for vacant land remains at an exemption for land valued at less than $350,000 and a concessional rate for land valued between $350,000 and $450,000.
In addition to the above, for contracts exchanged on or after 1 July 2023, the residence requirement will change for the FHBAS, First Home Owner grant, deferral of transfer duty payment for off the plan transactions and exemptions for tenants of the Department of Housing and Aboriginal Housing Office. Eligible purchasers are required to live in the property as their principal place of residence within 12 months of settlement for a continuous period of 12 months to satisfy the residence requirement.
If you are looking at purchasing a property, contact Watson Law to speak to one of our friendly staff.