The new Property Tax (First Home Buyer Choice) Bill 2022 passed on 10 November 2022 whereby eligible first home buyers will have the choice of either paying transfer duty or an annual Property Tax.
It has been put in place to assist first home buyers whose purchase price exceeds $800,000.00 where no exemptions or concessions are available under the First Home Buyers Assistance Scheme (FHBAS).
The Property Tax will come into effect on 16 January 2023 and is accessible by eligible first home buyers entering into Contracts from 11 November 2022.
If you exchange Contracts between 11 November 2022 and 15 January 2023, you will need to pay the duty up front, however, eligible first home buyers may apply for a refund of the duty paid if they opt into the annual Property Tax.
The tax is charged at a rate of $400.00 + 0.3% of the land value if the property is owner occupied (you must still occupy the property for a continuous period of 6 months within the first 12 months after settlement).
If after this period, the property becomes an investment property, the rate will increase to $1,500.00 + 1.1% of the land value.
The property tax will be an annual fee calculated on the unimproved land value, not the purchase price and you can elect to pay a lump sum or by quarterly instalments.
If you sell the property, the property tax can transfer with the land only to another eligible first home buyer who elects to pay the property tax.
Unpaid property tax is a first charge on the land and will be payable by you if you sell the property and the incoming buyer does not elect to opt into the property tax.
We would love to assist you in your first property purchase. Please feel free to phone Michele Rumph on 02 4928 7300.
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