Stamp Duty Changes for First Home Buyers (Updated)

In NSW, there have been several stamp duty changes for first home buyers over the last couple of years. Most of these have been designed to make it easier for first-time buyers to access the property market. However, the rules have changed so quickly and so often, there is some confusion over what they currently are.

To help address this, we want to explore the latest round of stamp duty changes for first home buyers. As part of this, we will take a closer look at how the current arrangements compare to previous programs. We will also provide an overview of the First Home Buyer Choice program, which still applies to some recent buyers.

How much stamp duty do first home buyers need to pay?

The most recent stamp duty changes for first home buyers came into effect on 1 July 2023. Under these new arrangements, the amount you need to pay depends on the value of the property you buy. Specifically, for eligible first home buyers purchasing new or existing properties:

  • Properties bought for under $800,000 may be exempt from stamp duty. Previously, this threshold was set at $650,000.
  • Properties bought for between $800,000 and $1,000,000 may be able to have a reduced rate of stamp duty applied. Previously, the eligible property value range for this concession was $650,000 – $800,000.
  • Properties bought for over $1,000,000 attract the standard rate of stamp duty. Previously, this threshold was set at $800,000.

Whatever the amount, stamp duty needs to be paid upfront, as part of the settlement process. To apply for any exemption or concessional rates, you also need to meet a range of eligibility criteria. This includes:

  • Being over 18 years of age and an Australian citizen
  • Buying the property as an individual (i.e. not through a company or trust)
  • Having not previously owned or co-owned residential property in Australia
  • Having not previously received a stamp duty exemption or concession
  • Committing to moving into the property within 12 months of settlement
  • Committing to living in the property for a continuous period of at least 12 months
  • For more information on the current First Home Buyers Assistance Scheme, please see the Revenue NSW website.


What is First Home Buyer Choice?

Prior to the current arrangements, a program called First Home Buyer Choice (FHBC) was briefly in place. It specifically applied to first home buyers who exchanged contracts between 16 January 2023 and 30 June 2023. If you bought during this time, and were eligible, you would have been given the option to opt into FHBC.

This program represented a significant stamp duty change for first home buyers, providing greater flexibility in payment terms. It did this by introducing an annual land tax as an alternative to the traditional requirement to pay upfront. This effectively lowered the cost of entry and was designed to help first home buyers get into the market sooner.

It’s worth noting that FHBC only applied to properties that were bought for between $600,000 and $1.5 million. If the property was bought for $650,000 or less, the buyer could apply for a stamp duty exemption. And, if it was bought for over $1.5 million, stamp duty had to be paid upfront, at the standard rate.

Under the FHBC scheme, instead of paying all your stamp duty upfront, you could choose to make smaller annual payments. These would be made every year you owned the property, with the amount based on the property’s land value. The exact calculation also depended on whether you planned to live in the property or use it as an investment.

For example, say you bought an inner city apartment for $750,000, that had a land value of $270,000. If you planned to live in it, your annual payment would be $400 plus 0.3% of the land value – $1,210. But, if you rented it out, this increased to $1,500 plus 1.1% of the land value – or $4,470 a year.

While this program is no longer available to new buyers, it still applies to those who opted into it. This means that, if you previously chose the annual land tax option, you will still need to make yearly payments. And, this requirement will continue to apply until you sell the property.

Want more information?

To discuss recent stamp duty changes for first home buyers, including what they mean for you, contact Local Agency Co. Our team of real estate experts have an in-depth knowledge of the latest legislative changes and support schemes. We also have significant experience helping first home buyers plan the best way to break into the property market.



Scroll to Top