A purchaser/transferee may make an application to opt into property tax if at the time the application is made:
- the transferee is an eligible transferee, and
- the transfer is an eligible transfer
All eligible purchasers/transferees who are opting into property tax must:
A detailed list of forms and evidentiary requirements can be found in Chapter 4 - Lodgement requirements.
When to lodge an application
Where there is an agreement for sale or transfer of land
When residential land or vacant land is to be acquired under a contract or agreement by an eligible purchaser/transferee, an application to subject the land to property tax must be made before the transfer of the land.
A transfer of land where there is no agreement
If residential land or vacant land is being acquired by an eligible purchaser/transferee without a prior agreement such as a contract or agreement for sale, an application to subject the land to property tax must be made before whichever of the following occurs first:
Application approval
The eligible purchasers/transferees will be considered an included owner once they opt into property tax. Upon the transfer of the land, the proportion of the land that the included owner is acquiring will be subject to property tax instead of transfer duty. Therefore, if the included owner(s) acquire 100% of the land, the transaction will be exempt from transfer duty.
For information about transactions involving other purchasers, refer to Chapter 7 – Buying with an equity partner.
How to process First Home Buyer Choice applications
Most FHBC applications for transactions first signed on or after 11 November 2022 can be processed on Electronic Duties Returns (EDR). However, complex assessments must be submitted to Revenue NSW for assessment using eDuties.
The Duties Document Matrix (PDF, 506.95 KB) provides a comprehensive list of transactions which can be lodged via EDR or eDuties.
EDR assessments
The EDR document types will be updated to provide a streamline process for assessing First Home buyer Choice and First Home Buyers Assistance Scheme applications.
When processing in EDR, the document type to select will be “First home buyer” or “First home buyer – off the plan purchases”. Based on the information provided, the system will provide options to opt into First Home Buyer Choice or apply the First Home Buyer Assistance exemption or concession.
Other document types remain unchanged.
Note: A Duties Notice of Assessment will be generated as usual. However, the updated Duties Notice of Assessment will include additional details which identifies the parties opting into property tax.
eDuties applications
As per the Duties Document Matrix, any assessment that cannot be assessed in EDR must be uploaded to eDuties using application type “First Home Buyer Choice - Assessment Application”.
To avoid delays, ensure all relevant evidentiary requirements, proof of identity documents and forms are submitted in eDuties at the time of application.
Land wrongly opted into property tax
Under section 19 of the Property Tax (First Home Buyer Choice) Act 2022 land is taken to be wrongly opted into property tax if:
Where a property tax property is found not to have qualified for opt in:
- the property tax status of the property is revoked,
- the exemption from transfer duty when the property was opted in is revoked,
- the exemption from land tax when the property was opted in is revoked,
- the interest and/or penalty provisions of the Tax Administration Act 1996 are engaged to allow penalties to be applied in addition to the payment of transfer duty and land tax,
- any property tax paid is refunded (minus any amounts required to cover transfer duty and land tax liabilities, interest and penalties), and
- to the extent that there is an amount of unpaid duty or land tax remaining, it becomes a charge on the land.
