What assistance is there for first home buyers in NSW?

Written on:
December 10, 2020
Senior Solicitor

If you’re buying or building your first home, no doubt you’ve heard about the government assistance you may be entitled to.

But what are the current rules, how do you know if you’re eligible and what do you need to do to receive it? In this article, we have the answers to all these questions!

What assistance is available?

There are various forms of government assistance available to first home buyers. Which type you receive depends on your circumstances and whether you meet the eligibility requirements.

First Home Owners Grant

The First Home Owners grant is the most well known type of assistance. This grant provides up to $10,000 if you meet the following conditions:

  1. You are buying or building a brand new home
  2. The value of the home is less than $600,000
  3. The value of the house and land combined totals less than $750,000

Assuming these conditions are met, you are eligible to apply for the grant if:

  • you are an individual over age 18
  • you, or at least one party buying or building the home, is an Australian citizen or permanent resident
  • none of you have previously owned a house in Australia (even if you held it in joint names), and
  • none of you have received the First home Buyers Grant previously.
  • you, or one of the other first home buyers must move into the new home within 12 months after buying the property, and live there for at least six continuous months.

If you’re a member of the Australian Defence Force may you may be exempt from the six month residence requirement, providing all buyers are on the New South Wales electoral roll. If you’re buying land and building a new home, you must move in within 12 months after construction is complete.

You can apply for the grant through your bank at the same time as applying for finance. Your bank must be an approved agent of the First Home Buyers Grant, so it is important to check this before arranging your finance.

HomeBuilder Program

If you are building your own home – or substantially renovating – you could be eligible for $25,000 under the HomeBuilder Program. This program only applies for building contracts signed between 4 June 2020 and December 31 2020, and the build must also commence within 3 months of the contract being signed.

You can apply for assistance under the Home Builder Program through Revenue NSW.  Please note some conditions –  such as minimum spend amounts and income limits – apply.

First Home Buyer Assistance Scheme

This scheme reduces the amount of transfer duty payable when you buy or build your new home. You could be eligible for a partial reduction or a full exemption, depending on which conditions you meet.

This scheme applies to:

  • the purchase of an existing home
  • the purchase of a newly built home, and
  • the purchase of vacant land on which you will build your new home.

If any of the above occurs prior to 31 July 2021, you can apply for a full duty exemption if:

  • the value of the existing home you buy is less than $650,000, or
  • the value of the new home you build is less than $800,000, or
  • the value of the block of land is less than $400,000

You can apply for a concession (partial exemption) if:

  • the value of the existing home you buy is between $800,000 and $1 million
  • the value of the new home you buy is between $650,000 and $800,000
  • the value of the new block of land is between $400,000 and $500,000

Assuming these conditions are met, you are eligible to apply for the grant if:

  • you are an individual over age 18
  • you, or at least one party buying or building the home, is an Australian citizen or permanent resident
  • none of you have previously owned a house in Australia (even if you held it in joint names), and
  • none of you have received assistance under this scheme before
  • you move into the property within 12 months after buying it
  • you live at the property for at least 6 continuous months

You can apply for this assistance after you have exchanged contracts by completing the relevant application forms available from Revenue NSW and usually provided to you by your conveyancer. The conveyancer will then lodge partial or full exemption of duty for you.

New proposals

In November 2020 it was announced that further changes may be made to stamp duty on homes purchased within NSW. These include the payment of stamp duty annually over time instead of upfront.

This change, if implemented, could mean that the duty remains payable on the property each year, even if there is a change in ownership. If these proposals come into effect, the existing schemes may change or no longer apply.

Please note the above information is general in nature and is not legal advice. If you need help determining your eligibility under the current schemes or assistance with a property purchase, contact our experienced conveyancing team.

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