After successfully passing parliament late yesterday, the First Home Buyer Choice legislation gives first home buyers of properties worth less than $1.5 million two options:

  • Pay an annual fee equal to $400 plus 0.3% of the land value, or
  • Pay an upfront lump sum of stamp duty.

On a house valued at $1 million, this equates to either an annual fee of $3,400 per year or an upfront payment of $40,090. 

The initiative is set to lower the barriers for young buyers trying to get their foot on the property market ladder. 

Eligible first home buyers can access the scheme from 12 November, 2022.

NSW Premier Dominic Perrottet said the First Home Buyer Choice could help reduce the time needed to save for a deposit by two years.

“The great Australian dream of home ownership just got much easier for a generation of young families,” Mr Perrottet said.

“People can now save huge sums of money on the biggest purchase of their life.”

Treasurer Matt Kean said the new law would help thousands of young people save money.

“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.”

The initiative is uncapped and will be available for every eligible first home buyer.

For first round applicants, they will be required to pay stamp duty on purchases made until 15 January 2023 - they will then 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.

Data compiled from the NSW Treasury revealed if a first home buyer purchased a $1 million house and sold it 10 years later, the annual property payments over the 10 years would total $19,881 in present value terms compared with $40,090 in upfront stamp duty.

This means a saving of $20,209.

The plan is expected to cost the NSW government $728.6 million over the next four years and is likely the first step towards phasing out stamp duty permanently. 

See Also: NSW stamp duty vs land tax: Which leaves first home buyers better off?


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
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5.99% p.a.
5.90% p.a.
Principal & Interest
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  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.09% p.a.
6.11% p.a.
Principal & Interest
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

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