First home buyers win in NSW budget as stamp duty phased out

First home buyers will be able to opt for a smaller annual property tax in a landmark New South Wales government reform to begin phasing out stamp duty.

The state budget for 2022-23 has introduced a housing package called the First Home Buyer Choice to make homeownership “more feasible”.

The scheme means first home buyers can opt for a $400 annual property tax plus a percentage of the land value instead of a lump sum payment.

The focal point of the NSW budget has been the elimination of stamp duty on first-time homebuyers – a move that will save thousands on upfront costs. (Nine)

This new option is available for homes valued up to $1.5 million.

For example, a first-time homebuyer who purchases an apartment in Sydney for $830,000 with a land value of $265,000 has the choice between paying a $32,440 stamp duty upfront or an initial property tax of $1195.

First-time homebuyers are already exempt from paying stamp duty on homes up to $650,000 under existing government regulations.

NSW Prime Minister Dominic Perrottet said the government wants to “lower the barriers” for first-time homebuyers to have their own place.

“The First Home Buyer Choice will eliminate one of the biggest upfront costs of buying a home and help provide a brighter future for first home buyers,” said Perrottet.

Treasurer Matt Kean said this landmark reform will enable more young people to get a foot in the door on home ownership.

“We know that first-time homebuyers are forced to enter the real estate market later in life and this reform will make the real estate market more accessible to them,” he said.

“It means more New South Wales residents will move into their first home at a younger age and realize the great Australian dream of home ownership.”

NSW Prime Minister Dominic Perrottet said he lowered barriers to entry for those looking to enter the property market. (Nine)

The scheme will be rolled out from January 16 next year and the government plans to introduce the legislation later this year.

However, if you buy your first home between the entry into force of the legislation and January 15 next year, you can get your stamp duty back in full.

One of the most significant government investments this year has been first-time homebuyers, with a $2.8 billion housing package that includes stamp duty reform and the previously announced equity capital plan.

The shared stock plan, which is expected to reach a budget of more than $780 million, includes support for single parents, older single adults and frontline workers such as nurses and police to buy a home in the process.

First-time homebuyers will save thousands on initial costs by cutting stamp duties. (Peter Rae)

The government will contribute 40 percent for new homes and 30 percent for existing homes under $950,000.

Over the next two years, 3000 people will be eligible for the pilot program.

The state government also plans to upgrade more than 15,000 social housing units to ensure they are “suitable for older and less mobile residents” in a $300 million investment.

Tanya Plibersek shared a throwback photo on Twitter to remind young Australians to sign up.  The deadline for this is tonight at 8 p.m.

Throwback photos of federal politicians