Thousands of first home buyers will now be able to unlock the dream of home ownership sooner following the successful passage of the Perrottet Government's historic legislation in Parliament today.
For the first time in Australia, first home buyers will be given the choice between paying a smaller annual property fee or a large upfront stamp duty on their first property.
Premier Dominic Perrottet said the First Home Buyer Choice would be a game-changer for first home buyers, helping families get the keys to their first home sooner.
"The great Australian dream of home ownership just got much easier for a generation of young families," Mr Perrottet said.
"For the first time we will provide first home buyers with a choice, helping thousands of people to shave around two years off the time needed to save for a deposit.
"People can now save huge sums of money on the biggest purchase of their life."
Treasurer Matt Kean said the new law would help more young people enjoy the financial security that comes with home ownership.
"First Home Buyer Choice will significantly reduce upfront costs, reduce the time needed to save for a deposit and will see the majority of eligible first home buyers paying less tax overall," Mr Kean said.
"We are giving people the opportunity to decide for themselves what best suits their financial situation. Those buying a home to live in for life can still choose stamp duty, but for many, paying an annual tax for the limited time they actually live in the property will make more sense."
Eligible first home buyers can access the scheme from Saturday 12 November.
These buyers will be required to pay stamp duty on purchases made until 15 January 2023, but then will be able to apply for a refund of their stamp duty if they choose to opt into the annual fee.
From 16 January 2023 purchasers can opt in to the annual fee directly and will not be required to pay stamp duty.
First Home Buyer Choice will be available for dwellings costing up to $1.5 million. For the purchase of vacant land intended for the construction of a first home, the price cap will be up to $800,000.
The program is uncapped and will be available for every eligible first home buyer who wants to access it.
NSW Treasury data shows the breakeven period between upfront stamp duty and an annual property fee would be 36 years for an $800,000 apartment, 28 years for a $1 million townhouse, and 26 years for a $1.25 million house.
The same data shows that if a first home buyer purchased a $1 million house and sold it 10 years later, which is around the median holding period, the annual property payments over the 10 years would total $19,881 in present value terms compared with $40,090 in upfront stamp duty - a saving of $20,209.
The NSW Government has allocated $728.6 million to First Home Buyer Choice over the next four years.
Stamp duty comparisons
| Market value | Land value |
Stamp Duty |
Property fee (Year 1) |
Present value of property fee (10 years) |
Present value of property fee (20 years) |
Breakeven years | |
| House | 1,500,000 | 900,000 | 66,700 | 3,100 | 28,014 | 50,275 | 29 |
| Townhouse | 1,500,000 | 750,000 | 66,700 | 2,650 | 23,948 | 42,977 | 36 |
| Unit | 1,500,000 | 525,000 | 66,700 | 1,975 | 17,848 | 32,030 | 63 |
| House | 1,250,000 | 750,000 | 52,950 | 2,650 | 23,948 | 42,977 | 26 |
| Townhouse | 1,250,000 | 625,000 | 52,950 | 2,275 | 20,559 | 36,895 | 32 |
| Unit | 1,250,000 | 437,500 | 52,950 | 1,713 | 15,476 | 27,773 | 52 |
| House | 1,000,000 | 600,000 | 40,090 | 2,200 | 19,881 | 35,679 | 23 |
| Townhouse | 1,000,000 | 500,000 | 40,090 | 1,900 | 17,170 | 30,814 | 28 |
| Unit | 1,000,000 | 350,000 | 40,090 | 1,450 | 13,103 | 23,516 | 43 |
| House | 800,000 | 480,000 | 31,090 | 1,840 | 16,628 | 29,841 | 21 |
| Townhouse | 800,000 | 400,000 | 31,090 | 1,600 | 14,459 | 25,948 | 25 |
| Unit | 800,000 | 280,000 | 31,090 | 1,240 | 11,206 | 20,110 | 36 |
The First Home Buyer Choice is a key component of the Government's $2.8 billion Housing Package announced at the 2022-23 NSW Budget that aligns with the Housing 2041 vision.
