First time buyers tax relief

[Fisher1]

Hi all

I've noticed that first time buyers in NSW don't pay any tax if they buy a property for less than $600,000.  We are thinking of buying the smallest flat we can stand to live in for a year or so, while we look at bigger properties, or maybe build. This would save wasting money on rent and let us consider our options without feeling pressured.

I'm just wondering whether, if you get tax relief on your first property, whether you have to repay the tax if you live in it for less than a minimum amount of time before moving on. 

Thanks in advance if anyone can tell me.

 

Edited June 11, 2017 by Fisher1

[NickyNook]

I think you must be referring to the Stamp Duty concession?

If so,  the new concession (from 1st July 2017) is that there's no Stamp Duty payable on properties worth up to $650k - and a reduced amount payable on properties sold for $650k-$800k.

I believe the requirement is that one owner must live in the property for at least six months. So not a long time and hardly worth the effort of buying somewhere if the chances are you'd be living in it for less. I've no idea how it's policed and how/whether they'd want their money back if you moved in and out within six months, though!

There used to be a Capital Gains Tax issue if you bought/sold property within too short a time period - think it was within a year - as the ATO viewed it as trading and wanted to tax you accordingly.  Not 100% sure if it still applies - but it's something else to be aware of.

[Fisher1]

7 hours ago, NickyNook said:

I think you must be referring to the Stamp Duty concession?

If so,  the new concession (from 1st July 2017) is that there's no Stamp Duty payable on properties worth up to $650k - and a reduced amount payable on properties sold for $650k-$800k.

I believe the requirement is that one owner must live in the property for at least six months. So not a long time and hardly worth the effort of buying somewhere if the chances are you'd be living in it for less. I've no idea how it's policed and how/whether they'd want their money back if you moved in and out within six months, though!

There used to be a Capital Gains Tax issue if you bought/sold property within too short a time period - think it was within a year - as the ATO viewed it as trading and wanted to tax you accordingly.  Not 100% sure if it still applies - but it's something else to be aware of.

Thanks for that, that's really helpful.  We were actually thinking we could maybe live in the cheaper property for about a year and buy somewhere a bit bigger to live in while hanging on to the cheaper property and renting it out. Whether this would be feasible when it came to the crunch I don't know, but it was one idea we had for upping our income which is heavily dependent on the UK exchange rate.  It's great news that the tax relief concession ha gone up because we can look at bigger properties with a view to staying there for good.   

Thanks again.