Last Updated: 11th July, 2023


As of July 1, 2023, the First Home Buyer Choice no longer accepts new applications. Existing homebuyers who opted into the property tax will remain unaffected.

First Home Buyer Choice Calculator
Use this calculator to see how much property tax or upfront stamp duty a first-home buyer must pay when buying a property in NSW.
First, let's get an idea of the property you are looking for along with your eligibility.
Enter a value between 1 and 75.
Based on your answers and inputs, we’ve calculated the following:
Property Tax


Total Payable over year(s)


Per Annum

Stamp Duty


(One-time and Up-front payment)
Amount breakdown
Which Is Better?

You either need to pay a total property tax of $0 over years OR pay an up-front stamp duty $NaN.

The choice between paying an annual property tax or a one-time stamp duty will depend on your circumstances. We recommend you check in with your conveyancer to confirm your eligibility.

Disclaimer: These results are based on the information provided. It assumes you meet the eligibility requirements for the First Home Buyer Choice Scheme. The calculator should be used only as a guide. Please seek advice before making a decision.

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First Home Buyer Choice Scheme

The NSW Government has announced that first-home buyers purchasing properties with a home valued up to $1.5 million, or $800,000 for vacant land, will be able to choose between paying an upfront lump sum stamp duty or an annual property tax based on the land value of the purchased property.
This scheme is an attempt to make buying a home more affordable, as stamp duties are expensive and until now had to be paid upfront. It has been one of the biggest barriers to homeownership, frequently pushing back home purchases by two-and-a-half years. The policy is focused on helping young families enter the property market earlier.
The existing First Home Owner Grant and stamp duty exemptions and concessions are still in place. What this means is that if you are purchasing a new or existing property valued at less than $650,000, you are exempt from paying upfront stamp duty and, therefore, no need to even consider opting into the property tax.
If you are purchasing a new or existing property valued between $650,000 and $800,000, you will be entitled to a concessional rate of stamp duty. This means you can choose to pay the stamp duty at the concessional rate or opt-in to the First Home Buyer Choice Scheme and pay the annual property tax.

When Will The Scheme Begin?

Eligible first-home buyers who sign a purchase contract on or after 16 January 2023 will have the option of choosing between the upfront stamp tax and the annual tax. Those who signed from 12 November 2022 will have to pay the upfront stamp duty within their designated timeframe, but they will be able to apply for a refund from 16 January 2023, after which they will have to pay the annual tax.

Am I Eligible?

To qualify, you have to meet the following requirements:
  • You must be an individual, not a company or a trust.
  • You must be over 18 years old.
  • If a couple is applying, at least one person must be an Australian citizen or a permanent resident.
  • You or your spouse must not have previously owned or co-owned residential property in Australia.
  • You or your spouse must not have previously received a First Home Owner Grant or duty concessions.
  • The value of the property you are buying must be less than or equal to $1.5 million.
  • You must move into the property within 12 months of purchase and live in it for at least six months.
  • You must sign the contract of purchase on or after the scheme commencement date.

Is The Subsequent Owner Locked Into The Property Tax Scheme?

Should you decide to sell the property, the next owner will not be obliged to carry on with the property tax. If they are first-home buyers, they will be able to elect whether to pay the annual fee or the upfront stamp duty.

How Much Are Property Tax And Stamp Duty In NSW?

The annual property tax will be based on the land value of the purchased property. It will be:
  • For owner-occupied properties, $400 + 0.3 per cent of the land value of the purchased property.
  • If the property has been converted to an investment property, $1500 + 1.1 per cent of the land value.

First-home buyers will have to pay stamp duty if the property is above $650,000 for homes and $350,000 for land alone. Stamp duty is based on property market values, so the higher the value of the property, the higher the stamp duty. The duty rates are adjusted each year to align with the Sydney Consumer Price Index (CPI). Find out how much duty you’ll have to pay with our Stamp Duty Calculator.

Stamp Duty Vs Property Tax

This is still a new scheme, with many backing it and others, like the NSW Labour Party labelling it a ‘forever tax’. Here are some things to consider when deciding which one to choose:
  • How much have you saved? Stamp duty is a one-off payment, so once payment is made, homeowners who have saved for stamp duty get relief from having climbed that mountain. Property tax, on the other hand, is a perpetual expense, meaning it has to be paid for as long as the buyer holds onto the property.
  • How long do you intend to keep the property? Paying annual property tax may be the cheaper route at first, but it can exceed the stamp duty in the long run. Buyers who intend to hold on to the property for a very long time may be more inclined to choose stamp duty.

Difference Between Property Tax And Land Tax

Property tax is levied yearly on an individual property based on its land value. First-home buyers will not need to pay stamp duty or the land tax for their property if they opt to pay the annual property tax; however, the property tax will be applicable as long as the buyer has the house or land. It will only cease if they sell it.
Land tax is levied annually on the value of all the non-exempt property you own that is above the land tax threshold at the end of each calendar year (31 December). If your land value is below the land tax threshold, there is no need to pay land tax. The land tax threshold changes each year.
Land Tax Thresholds Tax Year 2022
Category Threshold Tax Rate
General threshold $822,000 $100 + 1.6% of the land value above the threshold, up to the premium rate.
Premium threshold $5,026,000 $67,364 + 2% of the land value above the threshold.

How Choosing The Property Tax Helps First-Home Buyers

  • The biggest relief comes from having a smaller fee to pay in comparison to a large lump-sum fee. Many first-home buyers are purchasing properties that are too expensive to be eligible for a full stamp duty exemption. This would solve such problems.
  • First-home buyers now have the opportunity to save up for stamp duty for their next home purchase if they want to move into a bigger home, keeping in mind that changing it from owner-occupier land tax to investment land tax does change the property tax amount.
  • This is an attractive option for those looking at apartments or units, as these would generally have lower land values than a property with a house and thus would mean paying less in property tax.
  • First-home buyers may now be able to increase their property price range. For example, if a property costs $1.4 million, home buyers can either pay over $60,000 in stamp duty or about $1,200 in annual property tax. The buyer may be encouraged to look at a higher-priced forever home, as the property has a lower upfront cost.

Other Taxes Are Applicable

Other property taxes will still be applicable to the buyer:
  • Land tax on investment properties is separate from the property tax, so an additional land tax will apply if buyers decide to convert their owner-occupier property to an investment property and the land value goes over the tax threshold.
  • Council rates are calculated based on your property valuation. These are issued annually to property owners.

Thinking About Buying A Home?

Our mortgage brokers can assess your situation and work out the best home loan options for you, find out whether you meet the First Home Buyers Choice scheme eligibility requirements and help you understand how the annual property tax repayments will be considered for lender serviceability assessments.
They can also clarify any questions you may have about the cost of stamp duty, property tax or first home owner grants.
Speak to one of our specialist mortgage brokers today by calling us on 1300 889 743 or fill in our free online assessment form to find out if you’re ready to buy.