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The NSW government announced a new approach to stamp duty for first home buyers (FHB) this week, with Yellow Brick Road Home Loans Executive Chairman Mark Bouris saying many will be better off paying stamp duty “up front” instead of opting for the new property tax option.
Under the new policy, from January 16, 2023, first home buyers in NSW will be able to choose between paying stamp duty or opt for paying a yearly property tax for properties valued up to $1.5 million.
Mark Bouris says “It’s pretty good policy in terms of borrowers, particularly first home buyers, who struggle to get the stamp duty…but what you’ve got to remember is that the stamp duty that we pay upfront, we pay on the purchase price, whereas the property tax … we pay on the unimproved value of the land and we pay it annually.”
Mark’s key tip
Mark says that the new policy leaves FHBs better off than before, simply because it gives them “choice.”
“It’s better than it was before. The property tax is not going to be forced upon you,” says Bouris, “So, I guess the takeaway from all this is, think about what you’re going to do, get someone to give you some advice or some help, and make the choice that suits you most at the time.”
“The bottom line is: get a relationship with a mortgage broker and tell the broker what your current deal is and say to the broker, ‘look if you ever see an opportunity for me to refinance, please contact me.’”
“Get all the hard work to be done by your mortgage broker because it’s very confusing out there at the moment. There are lenders out there who are offering variable rates, who haven’t adjusted their variable rates after the last RBA rate rise of 0.5% and it looks like a really low rate, but I tell you now, they’re going to adjust it very soon.”
See Mark’s analysis in the video below, or read more about the new policy in our in-depth explainer, here.
If you’re concerned about your borrowing power, or your current home loan, reach out to one of our experienced brokers to discuss your circumstances.
