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First Home Buyer Choice guide

This guide centralises key information on the First Home Buyer Choice (FHBC) Initiative and provides industry professionals a greater understanding of the legislative and operational requirements when an eligible purchaser/transferee is choosing to opt into property tax.

For a comprehensive understanding of the FHBC, it is recommended that the guide is read in its entirety.

Chapters

  1. First Home Buyer Choice overview
  2. Eligibility criteria to opt into property tax
  3. Application and approval to opt into property tax
  4. Lodgement requirements
  5. Retrospective applications to opt into property tax
  6. Off the plan purchase contracts
  7. Buying with an equity partner
  8. Approved trusts
  9. Surcharge purchaser duty
  10. Change of mind
  11. Complex scenarios
  12. Property tax information

6. Off the plan purchase contracts

On this page

From 1 July 2023, First Home Buyer Choice (FHBC) will no longer be available. Eligible first home buyers who exchange contracts on or before 30 June 2023 will have until completion of the agreement to opt in to FHBC.


Retrospective applications to opt into property tax closed on 30 June 2023.


Those who have already opted into FHBC will not be impacted.


On 1 July, the First Home Buyers Assistance Scheme (FHBAS) will be expanded. See the FHBAS guide for details.

Off the plan purchase contracts first signed on or after 11 November 2021

Off the plan purchase contacts signed on or after 11 November 2021, which settle on or after 11 November 2022, may be eligible to opt into property tax.

The date liability for transfer duty arises determines if an off the plan agreement is an eligible transaction to opt into property tax.

For off the plan purchase contracts that satisfy the criteria of Section 49A of the Duties Act 1997, liability for transfer duty arises at the earlier of:

  1. 12 months after the contract is signed or
  2. when settlement occurs.

For off the plan purchase contracts signed on or after 11 November 2021:

  • If settlement occurs between 11 November 2022 and 15 January 2023, the eligible purchaser/transferee will need to pay transfer duty. After settlement an application can be made to retrospectively opt into property tax and obtain a refund of the transfer duty. Applications to opt into property tax can be made between 16 January 2023 and 30 June 2023. Once Revenue NSW processes the application, the decision to choose property tax cannot be withdrawn.
  • If settlement occurs on or after 16 January 2023 and the eligible purchaser/transferee has chosen property tax, transfer duty does not need to be paid and the transaction can be processed on Electronic Duties Returns (EDR).
  • If settlement occurred before 11 November 2022, the purchaser/transferee is not eligible to opt into property tax.

Off the plan eligibility criteria

  • The off the plan purchase contract is for the purchase of a residence that is to be erected or developed before the contract or transfer is completed/settled.

    Note: A contract for the sale of vacant land is not eligible for the off the plan extended duty liability date.
  • As at the date of the contract, no purchaser/transferee is a foreign person and liable to Surcharge Purchaser Duty under Chapter 2A of the Duties Act 1997.
  • The residence will be used and occupied by at least one of the eligible purchasers as their principal place of residence for a continuous period of 6 months commencing within 12 months from the date of completion of the transaction, unless one of the eligible purchasers is a member of the permanent forces of the Australian Defence Force and all eligible purchasers are enrolled on the NSW electoral roll at the date of the transaction.

The table below is provided to assist practitioners manage eligible off the plan purchase contracts opting into property tax.

Ifand...Then...
Settlement occurred before 11 November 2022.   The transaction is not eligible to opt into property tax.
The contract was entered into on or after 11 November 2021

Settlement occured between

  • 11 November 2022
    and
  • 15 January 2023.
The contract was entered into between 11 November 2021 – 10 November 2022 Settlement will occur on or after 16 January 2023.
  • Transfer duty does not need to be paid.
  • An application for assessment must be submitted in eDuties using document type “First Home Buyer Choice – Assessment Application”.
The contract was entered into on or after 11 November 2022 Settlement will occur on or after 16 January 2023.
  • Transfer duty does not need to be paid.
  • The matter is to be treated as a typical assessment to opt into property tax and can be processed in EDR using document type “First Home Buyers – Off the plan”.

For complex transactions identified in the Duties Document Matrix an application for assessment must be submitted in eDuties using document type “First Home Buyer Choice – Assessment Application”.

The contract was entered into on or after 11 November 2021
  • Settlement will occur on or after 16 January 2023
  • Transfer duty has been paid
 An application for assessment and refund must be submitted in eDuties using document type “First Home Buyer Choice – Assessment Application”.

References

Schedule 4, part 2 of the Property Tax (First Home Buyer Choice) Act 2022 – Savings, transitional and other provisions

Section 49A of the Duties Act 1997 – Purchases “off the plan”

Chapter 2A of the Duties Act 1997 – Duty charged on certain residential land transactions involving foreign persons