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Dureka Homes

Affordable custom home builders in Melbourne

Stamp duty reform: Everything first-time homebuyers need to know

With the rising property prices and stagnating wages, getting together the cash for a home loan deposit and the associated fees has become more difficult for Aussies. Many people are stuck in rent cycles and spend the equivalent of a mortgage payment on monthly rent. As a result, they cannot save the large lump sum required to buy their first home.

Luckily, there are some new options available for first-home homebuyers in Australia. The government is now offering relief from daunting upfront costs like the stamp duty. Here’s everything you need to know about the new stamp duty reform, the First Home Buyers Assistance Scheme (FHBAS).

What is stamp duty?

Stamp duty is a tax charged by Australian state governments on purchases like properties and vehicles. It is a one-time upfront tax the government levies when a property or land changes ownership.

Also known as transfer duty, stamp duty is charged on the transfer of ownership of the property between two parties. So, whenever you buy a house, you need to pay stamp duty to transfer the right of the property into your name.

It can be around 4 and 5% of the property’s value. The specific amount is dictated by the duty taxes you buy in the state. These taxes are tiered, so the higher the purchase price, the greater the stamp duty.

What is the new stamp duty reform?

There has been a growing demand to reform stamp duty in recent years. Many experts and builders argue that the task is a barrier to homeownership and should be replaced with a more equitable tax system.

Luckily, the Australian governments of New South Wales and South Australia introduced the stamp duty reform specifically for first-time homebuyers. From 1 July 2023, the government provided a total exemption from transfer duty for homebuyers buying a new or existing home valued at up to $800,000.

Homes valued over $800,000 and less than $1,000,000 are eligible for a concessional rate. So, if you are a first-time homebuyer purchasing vacant land to build a home, you will receive an exemption for land valued up to $350,000 and a concessional rate for land valued over $350,000 and less than $450,000.

Who is eligible for the scheme?

To qualify for the First Home Buyers Assistance Scheme, you must be a first-time homebuyer and an Australian citizen or a permanent resident of Australia for at least 18 years. Other eligibility criteria include:

  • The property value should be within the threshold amounts
  • The transfer needs to be for the whole property
  • You must be over 18 and an individual, not an organisation or trust
  • You and your spouse must never have owned/co-owned any residential property in Australia
  • You and your spouse must never have previously received an exemption or concession under the scheme
  • It is required to move into the property within 12 months from settlement, and you must live there for at least 12 continuous months

What are the benefits of the scheme?

This First Home Buyers Assistance Scheme is designed to make it easier for first-time homebuyers to afford their first home. Over 80% of first-time homebuyers will pay no stamp duty or a reduced rate.

The government says that a first-time homebuyer purchasing an $800,000 property can save up to $31,090 under the new scheme.

Need more information?

Contact a leading team of builders to learn more about the First Home Buyers Assistance Scheme. As licensed custom home builders, we will help you apply and take full advantage of the First Home Buyers Assistance Scheme.

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