Help for First Home Buyers
Navigating the available grant schemes can be complicated, especially as a first home buyer. The eligibility, the compliance, the application and approval process… it can seem overwhelming, but it doesn’t need to be that way. We’re here to help.
What is the First Home Buyer Assistance Scheme?
As a first home buyer in New South Wales, you may be eligible for the First Home Buyer Assistance Scheme (FHBAS) which makes you eligible for a concessional rate or exemption from paying the stamp/transfer duty exemption. You may also be eligible for a First Home Owner Grant.
Different from the First Home Owner Grant, the FHBAS applies when you are:
Buying an existing home
Buying a new home
Buying vacant land on which you plan to build a home
You may receive a full or partial exemption on transfer duty when buying your first home in Australia that is valued at no more than $1,000,000. You can apply if this home is the first you or your spouse have owned or co-owned in Australia (some exceptions do exist). You will need to be an Australian citizen or permanent resident, at least 18 years old, move into the property within 12 months and live there continuously for at least six months.
From the 1st August, the NSW Government announced increased thresholds for purchases of new homes and vacant land. If you previously thought you did not qualify, it may be worth taking another look.
NSW Stamp Duty News: First home buyers that buy NEW homes under $800,000 will pay NO stamp duty from August 1st, 2020, NSW Government announced. The change to the thresholds will only apply to newly built homes and vacant land, not to existing homes, and will last for 12-months. Our NSW stamp duty calculator is updated to reflect this change as the Bill was approved in NSW Parliament on 11 August 2020.
As a guide, with the FHBAS you can save over $20,000 on stamp duty when you purchase an eligible property valued at $850,000.
Buying as a new home in New South Wales as your primary residence, not as a foreign investor the numbers look like this:
Value of the property: $850,000
With FHBAS:
Fees
Mortgage: $146.40
Transfer: $146.40
Stamp Duty: $10,083.75
Total: $10,376.55
Without FHBAS:
Fees
Mortgage: $146.40
Transfer: $146.40
Stamp Duty: $33,585.00
Total: $33,877.80
A difference of $23,501.25
First Home Buyer Assistance Scheme: 1 August 2020 – 31 July 2021
New homes
Buy a new home valued at less than $800,000, apply for a full exemption, and pay no transfer duty.
Buy a new home valued between $800,000 and $1 million and apply for a concessional transfer duty rate. The amount will be based on the value of your home.
Exisiting Homes
Buy an existing home valued at less than $650,000, apply for a full exemption and pay no transfer duty.
Buy an existing home valued between $650,000 and $800,000 and apply for a concessional transfer duty rate. The amount will be based on the value of your home.
Vacant land
You won’t pay transfer duty if your land is valued at less than $400,000.
For land valued between $400,000 and $500,000, you’ll receive a concessional rate
What is the First Home Owner Grant?
The First Home Owner Grant can provide $10,000 towards the purchase price of the property, in addition to the FHBAS benefits. The eligibility is slightly different. The requirements for the grant are:
Buying or building your first home
It is a new home that no-one else has lived in
It is values at no more than $750,000
The other eligibility criteria is similar – not having owned or co-owned a home in Australia, moving into the property within 12 months, living there for at least six continuous months, being an Australian citizen or permanent resident, and being at least 18 years old. You can view the additional requirements below.
But wait, there’s more…the HomeBuilder Grant
The Australian Government HomeBuilder is a scheme operating from 4th June – 31st December 2020 providing eligible Owner Occupiers with a grant of $25,000 to build a new home, substantially renovate an existing home, or buy a home/new home off the plan.
Under this limited time scheme, ‘New Home’ is defined as one that has not previously been sold or occupied as a place of residence (eg. spec build) and where the construction has commenced on or after 4th June 2020. You can apply, before 31st December 2020, in a multi-step process after an eligible HomeBuilder contract has been entered into. Construction itself doesn’t need to commence before the 31st December 2020 – but it must commence without three months of the contract date.
The HomeBuilder grant complements the First Home Owner Grant and the First Home Buyers Assistance Scheme.
If you have further questions about the exemptions, concessions, and grants available for buying your first home off the plan, contact Matt today.
First Home Owner Grant – from NSW Government, Department of Revenue:
The grant is available for
contract to buy a new home
building contract by the owner of the land
owner of the land building their own home.
To receive the grant for your property
you must be an individual, not a company or trust
you must be over 18
you, or at least one person you’re buying with, must be an Australian citizen or permanent resident.
You won’t be eligible for the First Home Owner Grant (New Homes) scheme if you or your spouse have previously:
owned or co-owned a home in Australia
received a first home owner grant in Australia.
However, you may still be eligible if
you purchased a residential property after 1 July 2000 and
didn’t live in it for more than six continuous months.
Requirements for living in the property
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 buying land and building a new home, you must move in within 12 months after construction is complete.
If you’re a member of the Australian Defence Force you may be exempt from the six-month residence requirement, providing all buyers are on the New South Wales electoral roll. Contact us for more details.
What’s considered a ‘new home’?
If you’re buying a home, you can apply for the grant if:
this is the first time the house has been sold, and
the house has never been lived in before you move in, including by the builder or a tenant.
Recently renovated homes
Your home will also be considered new if it has been substantially renovated before you buy it. You might be eligible for the grant if:
most or all of the house was removed or replaced
this is the first time the home has been sold after the renovations
it hasn’t been lived in since being renovated, including by the builder or a tenant.
Claiming the First Home Owner Grant in NSW
You can apply for the First Home Owner Grant (New Homes) scheme through your bank or financial institution when you’re arranging finance to buy your home.
If you’ve already completed the purchase process or construction has commenced, you can send your application straight to us.
We’ll need to receive it within 12 months of settlement or the date the construction of your new home is completed.
We may also ask you to provide additional documents.