First home buyers in NSW who opted-in to the new annual property tax regime will begin to receive their first notice of assessment for 2022-23 from 24 April onwards.
A confirmation letter will be sent out by Revenue NSW in relation to their property tax registration and payment obligations.
How does anuual property tax work?
First home buyers now have the option of choosing between paying an upfront stamp duty or an annual property tax.
The annual property tax option is available to first home buyers on the purchase of a home worth up to $1.5 million, or $800,000 in the case of a vacant land.
Owner-occupier
Eligible owner-occupiers may opt-in to pay an annual property tax, this can be done by applying through the standard conveyancing process and obtaining approval.
Owner-occupiers who opt into the annual property tax are charged at a rate made up of a fixed amount of $400 plus 0.3% of the unimproved land value of the property as at the end of the relevant financial year.
Owner-occupier to investor
Eligible first home buyers are allowed, under the new property tax regime, to change the status of the property from owner-occupier to investor.
Investment property tax rate is made up of a fixed amount of $1,500 plus 1.1% of the property’s unimproved land value as at the end of the relevant financial year. This annual property tax replaced NSW land tax for property investors.
Notice of Assessment
If you opted-in to the annual property tax regime on or after 16 January 2023, you should receive your first property tax notice of assessment for 2022–23 in the coming months.
The property tax is charged on a pro rata basis based on ownership days in a financial year and will be payable by 30 June 2023.
If you are planning to buy your first home and need to know more about the new scheme, please contact our office. We will be happy to run through the calculations with you.