Government benefits for first home buyers in NSW
First Home Owner (New Homes) Grant
This grant applies to buying a new home or building your first home. The NSW Government will provide you with a $10,000 grant to assist you with your purchase or build.
If you’re buying a new home, this grant is available for houses, townhouses, apartments and units with a purchase price that must not exceed $600,000.
If you are building your new home, the land purchase price and construction cost must not exceed $750,000.
This grant is only available to permanent residents or citizens, and not available to temporary residents.
If you have owned or have had a share in a property since 1 July 2000 that has been solely used for investment purposes, you may still be eligible for the grant on another property.
The best way to apply for this grant is via the bank that you are getting your home loan from. Most mortgage brokers will assist you with completing the application while your application is being prepared.
For any additional information or questions, the best point of contact is the NSW Revenue Office Grant and Schemes on 1300 130 624 or [email protected]
First Home Buyers Assistance Scheme
This scheme is to help first home buyers by waiving or providing a discount on the stamp duty cost related to buying a property. This scheme is available for new or existing home, or vacant land in NSW
The key eligibility criteria for this scheme are:
- At least one of the first home buyers must be an Australian citizen or permanent resident
- Move into the home within 12 months after settlement and you must live in the property as your principal place of residence for at least 12 months continuously (if you signed the contract before 30 June 2023, you only need to live in the home for at least 6 months continuously)
- You and your spouse or partner must never have owned or co-owned residential property in Australia
- You and your spouse or partner must never have previously received an exemption or concession under the scheme
Property value threshold for new and existing homes in NSW:
- Value of the property is up to $800,000 – full exemption (saving $30,735)
- Value of the property above $800,000 and less than $1M – you will receive a discount on the stamp duty cost (the rate of discount reduces as the value approaches $1M)
Property value threshold for vacant land in NSW:
- Value of the land is up to $350,000 – full exemption (saving $10,495)
- Value of the land is above $350,000 and less than $450,000 – you will receive a discount on the stamp duty cost (the rate of discount reduces as the value approaches $450,000)
Find out how much stamp duty you will save as a first home buyer by using our stamp duty calculator here
First Home Guarantee (Australia wide)
The first home buyer’s guarantee (FHBG) is a federal government assistance program to help reduce the amount of deposit for eligible first home buyers and avoid paying expensive Lenders Mortgage Insurance (LMI).
The FHBG can support first home buyers with a minimum of 5% deposit, greatly reducing the barrier of entry and the time it takes to save the required deposit to be able to buy your first home.
In addition to the First Home Guarantee, there are also another two schemes that you should be aware of which may suit your situation.
Regional First Home Buyer Guarantee
Specifically applicable to first home buyers who have lived in the regional area in the last 12 months
Family Home Guarantee
Support for single parents or single legal guardians to purchase a property with a minimum 2% deposit
There are some key eligibility criteria you need to be aware of:
- buying as an individual or together with another applicant
- be an Australian citizen or permanent resident
- intending to be owner-occupiers of the purchase property
- be first home buyers buyers or previous home owners who haven’t owned a property in Australia in the past ten years
- For individuals, you must be earning equal to or less than $125,00 income evidenced from your Notice of Assessment (issued by the ATO)
- For joint applicants, you must be earning equal to or less than $200,000 income evidenced from your Notice of Assessment (issued by the ATO)
Property types available with FHBG
Eligible properties under the FHBG include
- existing house, townhouse or apartment
- house and land package
- buying land and building your home via a separate contract
- off the plan apartment or townhouse
Price Caps: it’s important to be aware that there are price caps as part of the eligibility criteria. This differs between states. For NSW, the following applies:
- $900,000 for capital city and regional centres (Newcastle and Lake Macquarie, Illawarra)
- $750,000 for the rest of NSW
- Full price caps across the country is available here: https://www.nhfic.gov.au/support-buy-home/property-price-caps
Important things to note about this benefit:
- Although the minimum deposit required under this guarantee is 5%, the banks that are participating in this scheme may require the individual to increase their deposit to more than the minimum 5% even though the scheme allows for a minimum of 5% deposit
- Make sure you have completed your tax returns for the last financial year and have received your Notice of Assessment as this is a key qualifying criteria for this scheme
- There is a limited number of spots each financial year and the number of available spots between participating banks can vary. Your mortgage broker will be able to advise you which bank have available spots under this scheme
How to apply?
You can apply for the FHBG with participating banks via mortgage brokers or their lending specialists. There are numerous participating banks offering the FHBG so it’s important as a borrower to speak to a mortgage broker to find out which participating bank will offer the most suitable home loan solution.
For further information please visit the official government website: https://www.nhfic.gov.au/support-buy-home/first-home-guarantee or contact them via 1800 549 767
Comparison table of different Home Guarantee Schemes: https://www.nhfic.gov.au/support-buy-home/guarantee-comparison-table
Home Guarantee Fact Sheets: https://www.nhfic.gov.au/support-buy-home/tools-and-resources
Frequently Asked Questions: https://www.nhfic.gov.au/support-buy-home/frequently-asked-questions
First Home Super Saver Scheme
This is a very under rated and utilised scheme which aims to assist first home buyers by helping them speed up their ability to save for a deposit to purchase their first home.
In summary, the scheme enables you to save tax by allowing you to make voluntary contributions into your super fund. These voluntary contributions can then be released to help you purchase your first home.
You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year , up to a total of $50,000 across all years.
Very broadly, in general, the idea of this scheme is for you to salary sacrifice into your super which will only attract 15% tax rather than paying the marginal tax rate. Your contributions may also help you earn investment returns, which further accelerates your ability to save.
For example, an individual earning $95,000 a year before tax would normally receive $71,758 after tax. The tax paid would be $23,242.
If the individual salary sacrificed up to the concessional limit of $27,500 that would mean the amount of $17,050 would only be taxed at 15% so the taxable income will reduce from $95,000 by $17,050 to $77,950. Tax payable would be $17,359.75.
This is a saving in tax of $23,242 (before salary sacrifice) – $17,359.75 (after salary sacrifice) = $5882.25 which will go towards saving for a deposit.
This scheme is more complicated then the others, and also takes time to accumulate the benefits, which is the reason why this scheme is not as popular as the others. However, it is certainly beneficial to help first home buyers purchase their home sooner.
For more information, please visit the ATO website to find out all the information related to this scheme here.