November Wrap Up 2022

Greetings from Scoutable and welcome to our November Wrap Up.

I hope you are well. 

CoreLogic’s national home value index fell 1% in November, as shown in the table below. Although values are continuing to trend lower, the rate of decline has eased since the national index dropped by 1.6% in August.

The NSW government passed the First Home Buyer Choice policy into legislation on the 11thNovember. The policy will allow first home buyers to choose between paying a smaller annual property tax or an upfront stamp duty on their first home.
 
Key details below.

  • The policy is for first home buyers for a purchase price up to $1.5m. For the purchase of vacant land for construction of a new home, the price is capped at $800,000

  • To be eligible, the first home buyer must be over 18 years of age, must not have owned or co-owned residential property in Australia, must live in the property for a continuous six-month period within the first year of ownership

  • The contract of purchase must be signed on or after the 11th November 2022

  • Contracts signed on or after 16th January 2023 will be able to opt into the property tax and will not be required to pay stamp duty

  • Contracts signed between 11th November and 15th January that settle before the 15th January will still need to pay stamp duty but can seek a reimbursement after 16th January

  • Contracts signed between 11th November and 15th January that settle after the 15th January will be able to opt in for the property tax

  • In place of an upfront stamp duty payment, the annual property tax will be $400 per annum, plus 0.3% of the land value (for 2022 – 2023 & 2023 – 2024)

  • Should the property convert to an investment (after live in requirements are met), the property tax rate will be $1,500 per annum, plus 1.1% of the land value (for 2022 – 2023 & 2023 – 2024)

  • The tax rates will be indexed each year from 2024 – 2025, so that the average indexed property tax payment rises in line with average annual incomes. The year-on-year growth of individual property tax payments are capped at a maximum of 4%. (Note - over the past 15 years, GSP (Gross State Product) per capita has seen average annual growth of 3.2%)

  • Stamp duty exemptions will still apply for properties up to $650,000 (no stamp duty), and stamp duty concessions will still apply for properties up to $800,000 (stamp duty sliding scale).

  • Only first home buyers have the option to pay an ongoing property tax, while all other home buyers must pay stamp duty

  • The property will not be subject to an ongoing property tax once it is sold on

Examples

30 Woodbury Street, Marrickville recently sold for $1,500,000. With a land value of $1,000,000, the Annual property tax would be $3,400 ($400+0.3% of land value). Stamp duty would be $66,700. It would take 19.6 years of ownership to match the stamp duty (at current rate, however, annual tax will increase each year).

14/15 Bryon Street, Coogee recently sold for $940,000. With a land value of $409,500, the annual property tax would be $1,629 ($400+0.3% of land value). Stamp duty $37,390. It would take 22.8 years of ownership to match the stamp duty (at current rate, however, annual tax will increase each year). 

Source & further information via the link below:
https://www.nsw.gov.au/housing-and-construction/first-home-buyer-choice
https://fhbcalculator.service.nsw.gov.au

If you would like to discuss First Home Buyer Choice policy, the current market conditions, or have any general property questions, please get in touch.

Until next month,

Kellie Landrey | Principal Buyers Agent

IN THE NEWS

WILL HOUSE PRICES GO UP IN 2023? THE ANSWER LARGELY DEPENDS ON INTEREST RATES 
https://www.abc.net.au/news/2022-11-29/house-prices-to-rise-if-conditions-favourable/101705690

'BLOOD ON THE STREETS': DEVELOPERS BRACE FOR PAIN 
https://www.theurbandeveloper.com/articles/australia-developers-development-outlook-fortis-thirdi-sammut-sydney

RENT BIDDING BECOMES INCREASINGLY COMMON ACROSS SYDNEY
https://www.realestate.com.au/news/rent-bidding-becomes-increasingly-common-across-sydney/

PROPERTY OF THE MONTH

6 CABARITA ROAD, AVALON BEACH, NSW

Sydney provides many luxury waterfront estates. 6 Cabarita Road, Avalon Beach, known as ‘Celeste’, is one such property.
 
Avalon Beach is positioned 40km north of Sydney’s CBD and provides community facilities including an RSL club, surf club, golf club, supermarket, shops, cafes, restaurants and a cinema, along with Avalon Beach and easy access to neighbouring beaches, including Palm Beach & Whale Beach. 
 
6 Cabarita Road spans 1,631sqm of north facing waterfront land, with 30m of water frontage. The property is set over three levels, providing six bedrooms, seven bathrooms, office, multiple living spaces, games room, internal lift, parking for eight cars, boathouse, 20m outdoor swimming pool and sauna. It also features a jetty with berth for a large vessel and private shady beach.
 
The vendor reportedly spent $30 million rebuilding the property and paid just under $13m for the estate in 2017. There is no formal price guide, but the property is expected to sell for around $50 million. Should Cabarita Road achieve $50 million, it will surpass the current Northern Beaches record of $27.5 million.

More photos available via the link below. 
https://www.domain.com.au/6-cabarita-road-avalon-beach-nsw-2107-2018529310

If you'd like to know more about this property or any others, please get in touch.