Stamp duty overhaul for FHB
First home buyers will now have the option to pay upfront stamp duty or opt-in for an ongoing land tax of 0.3% of the land value plus a one-off fee of $400. The scheme is capped at a max purchase price of $1.5m and will begin on the 16th of Jan, 2023. If the property is later sold to a non-first home buyer, upfront stamp duty will be applicable (no land tax option).
Currently, stamp duty is waived up to $650k with a reducing discount of up to $800k. For prices under $800k, stamp duty costs roughly 4.4% of the purchase price.
With the new changes in place, a $1.5m property purchase for a first home buyer could see an upfront saving of $67k, which in comparison to land tax would be $3000 per annum, taking roughly 15 years before the land tax exceeds the upfront stamp duty.