The NSW Government’s assistance initiatives for first home buyers has changed over time. The current scheme is the First Home Buyer Assistance Scheme. This Scheme allows certain first home buyers to claim a stamp duty exemption or concession on their purchases, and relates to buying an existing home, new home or vacant land on which a new home is to be built. If you are building or buying a new home, the First Home Owner Grant (New Homes) Scheme may also be relevant to you.
Stamp duty exemptions and concessions
In respect to vacant land valued less than $350,000, a first home buyer can apply for a full stamp duty exemption. For land that is valued between $350,000 and $450,000, a first home buyer can apply for a stamp duty concession (reduced stamp duty). A first home owner who is buying or building a new home is also entitled to apply for a $10,000 grant which is discussed further below.
A first home buyer can apply for a full stamp duty exemption for existing homes valued less than $650,000.00. For existing homes valued between $650,000.00 and $800,000.00, a first home buyer can apply for a stamp duty concession. The amount of the concession is dependent on the value of the existing home.
New Home Grant
The NSW Government has also adopted the First Home Owner Grant (New Homes) Scheme. This scheme allows for a first home buyer who is buying or building a new home to apply for a $10,000 grant.
In order to be eligible for the grant, you must have entered into a contract to purchase a new home, a building contract or you must be an owner building your own home. The purchase price of the new home must be less than $600,000 and in respect to purchasing land to build a new home, the total price of the land and home must not exceed $750,000.
If a first home buyer purchases an existing home that has been significantly renovated (majority of the house has been removed or replaced) and has not been lived in since the renovations, then the first home buyer, if they satisfy the above requirements, will also be eligible to make a claim for the grant.
The criteria for the stamp duty exemption and concessions and the new home grant are substantially similar. In general terms, in order to be eligible you must satisfy the following:
- With respect to the Assistance Scheme, the date of the Contract for sale of land must be on or after 1 July 2017;
- You are an individual and above the age of 18 years;
- You must not have owned property in Australia and never have received an exemption or concession previously;
- You must be an Australian Citizen or permanent resident (if purchasing with another, this only applies to at least one first home buyer); and
- You must move into the property within 12 months after purchasing the property and live in the property for at least six continuous months (this just needs to apply to at least one first home buyer). If you are a member of the Defence Force and the other persons your purchasing the property with are on the NSW electoral roll, then you are not required to meet the living requirements.
If your circumstances change and you are unable to move into the property within the prescribed period and/or live in the property for at least six continuous months, you are no longer eligible and will be required to repay the grant. Non-disclosure of your change of circumstances can result in further penalties being imposed.
How to apply
Ordinarily, your financial institute will assist with applying for the grant in consultation with us. When acting on a property purchase, we will always discuss the available assistance with you and help you determine if you are a first home buyer. We can also prepare all the necessary application forms for you and will liaise with Revenue NSW regarding stamp duty matters.
In the event that you require assistance with the new home grant and/or applying for a stamp duty exemption or concession as a first home buyer, please contact KS Law on 02 9135 7511 or firstname.lastname@example.org.
The content of this article is intended to provide a general guide to the subject matter. Specialist individual advice should be sought about your specific circumstances.