ATTN: First Home Buyers!

Have you heard the conversation about stamp duty vs annual property tax?

If you live in NSW and are a first home buyer, you will need to decide on whether to pay stamp duty on your purchase or an annual property tax.

On a $1m property, you will need about $93,000 of your own money to put toward the purchase. However, if you chose to pay a land tax instead, you will need about $56,000.

Land tax costs $400 plus 0.3% of the land value of the property being purchased.

So are you really better off choosing to pay the land tax instead of stamp duty?

It really depends on how long you plan to own the property.

On an $800,000 property (assuming a growth on the land value each year of 2.5%), it would take approximately 14 years to break even.

But, half of all owner-occupiers sell their properties within 10.5 years, and many first-home buyers sell in about 5-6 years.

Try to visualize if the home you are looking to buy will be your “forever” home, or if will you need a different kind of home as your future circumstances change.

If you are a first-home buyer and would like to discuss this in more detail and what the decision could mean for you, please reach out.

Have a wonderful week

Build & Protect Financial Services