Buying your first home is an exciting time and a significant milestone in your life. However, navigating the purchasing process can be daunting and expensive, particularly in the competitive New South Wales market. Between stamp duty, inspections, conveyancing, and insurance – the costs begin to add up.

Thankfully, the NSW Government offer multiple financial incentives and support for aspiring homeowners in the state. Through the NSW First Home Buyer’s Grant and Assistance Schemes, the Government are helping to make homeownership more liable, accessible, and affordable to the masses.

This article will clearly outline the first home buyer benefits, assistance schemes, and property incentives available in New South Wales in 2023. We will also help you determine your eligibility for each incentive and teach you how to maximise your grant benefits when purchasing your first home in NSW.

NSW First Home Buyer Benefits

The New South Wales Government offers several concessions, exemptions, and grants to help ease the financial burden for prospective homeowners entering the property market. These financial benefits are designed to help throughout the home buying process, and each scheme has a different purpose.

If you are a resident of NSW, hoping to finally purchase the home of your dreams, and break into the property market, here is a breakdown of the five best first home buyers’ benefits you can avail of.

1. First Home owner’s Grant 2023

The First Home Owner’s Grant (FHOG) is a $10,000 subsidy available to first-time buyers in NSW building or purchasing a brand new home. This grant is only available to newly built homes, properties in construction, or substantially renovated homes. It is not available for established homes or anyone looking to buy a second property.

Am I Eligible?

To take advantage of the First Home Owner’s Grant, it doesn’t matter if it’s a house, townhouse, apartment, unit, or a new-build under construction that you’re buying. However, you do need to meet the below criteria:

  • You can only apply as a person or a couple, not as a company or trust.
  • You must be at least 18 years old.
  • At least one person applying must be an Australian citizen.
  • You have not previously owned a home or any residential property in Australia.
  • You have yet to receive a First Home Owner Grant in Australia.
  • You must live in your first home as your principal residence within 12 months.
  • You must live within the property for a minimum of 6 months.
  • The purchasing price of your new home cannot exceed $600,000.
  • If you’ve bought land to build a home, the total combined costs of the land and the house itself must not exceed $750,000.

2. Transfer of Duty and First Home Buyer Assistance Scheme (FHBAS) in 2023

As a first-time buyer in NSW, you might be entitled to an exception from paying transfer duty or at least a concessional rate under the First Home Buyer Assistance Scheme (FHBAS). The NSW Government set up this scheme to reduce the financial burden for citizens hoping to finally get on the property market and buy their first home.

Unlike the First Home Owner Grant, which is only available for brand new homes, the FHBAS applies to:

  1. Buying an existing or established home
  2. Buying a brand-new home
  3. Purchasing vacant land that you intend to build a house on

Stamp Duty Exemptions and Concessions

If you are an eligible first-time buyer in New South Wales, you may be exempt from paying any stamp duty on properties valued up to a certain threshold. If your property is valued above this threshold, you will receive concessions.

These thresholds differ depending on if your house is a new home, an existing home, or it is vacant land and are broken down as follows:

1. Existing Homes 2. New Homes 3. Vacant Land
Fully Duty Exemption If you purchase an existing home for less than $650,000, you are eligible for a full exemption and will pay no transfer duty. If you’re buying a new home valued at less than $650,000, you can apply for a full exemption and avoid paying transfer duty. If the land you buy costs less than $350,000, you won’t pay any transfer duty.
Concessional Transfer Duty Rate For existing homes, valued between $650,000 and $800,000, you can apply for a concessional transfer of duty, and the amount will depend on the value of your home. When purchasing a new home valued between $650,000 and 800,000, you can apply for a concessional transfer duty rate, which will depend on your new home’s value. If the land you’re purchasing is valued between $350,000 and $450,000, you can apply for a concessional rate.

3. The First Home Guarantee (FHBG)

The First Home Guarantee (FHBG) is a subsection of the Australian Government’s Home Guarantee Scheme (HGS), created to help first-time buyers and make purchasing a home easier. Simply put, the FHBG provides first-time buyers with more purchasing power and financial security.

What is the First Home Guarantee?

Under the FHBG, eligible prospective buyers in NSW can purchase a home with as little as a 5% deposit. As part of this process, successful applicants will receive a home loan from a Participating Lender guaranteed by the National Housing Finance and Investment Corporation (NHFIC) and will not need to pay Lender’s Mortgage Insurance. This significantly reduces costs while providing extra financial security for first-time buyers.

It is important to note that the Guarantee is not a cash payment you receive or a deposit for a home loan. Instead, it gives you greater purchasing power and means you do not need to save as much for your deposit.

Am I Eligible?

The First Home Guarantee (FHBG) was created to help first-time home buyers in Australia who require financial support and security overcome the barriers and challenges that come with this process. As a prospective buyer in NSW hoping to benefit from this scheme, you must ensure to meet the following criteria:

  • You are applying as an individual or couple and not a company or trust
  • You are an Australian citizen
  • You are at least 18 years old
  • As an individual, you are earning less than $125,000
  • As a couple, your combined earnings are less than $200,000
  • You will be the owner-occupier of the home, with no intention to rent it out
  • You have not previously owned a property in Australia or received the FHBG grant

With the First Home Guarantee in NSW, there is a price cap on properties of $900,000 in Sydney and other regional centres such as Newcastle, Geelong, Illawarra, Lake Macquarie, Gold Coast, and Sunshine Coast. In the rest of the state, there is a price cap of $750,000, so you must ensure the home you are buying does not exceed this in value.

4. Shared equity Home Buyer Helper 2023

The Shared Equity Home Buyer Helper is another NSW Government initiative designed to help eligible residents within the state purchase a home without needing a massive deposit.

What is the Shared Equity Home Buyer Helper, and How does it work?

This scheme is targeted towards single parents, older singles, and critical worker first home buyers, and it helps eligible buyers to purchase a new or existing home with as little as a 2% deposit. To achieve this, the NSW Government contribute a proportion of the purchasing price and, in return, will receive equivalent interest in the property.

The contribution the Government make is a percentage of the purchasing price, and the maximum amount they contribute is determined by whether it is an existing home or a new home that you are purchasing.

  • For an existing home, the maximum contribution is 30% of the property value
  • For a new home, the maximum contribution is 40% of the property value

This scheme is relatively flexible for participants. As long as you remain eligible, you are not required to make any repayments and will not be charged interest or rent. Furthermore, the NSW Government allows you to make voluntary payments, meaning you increase your ownership of the property.

Am I Eligible?

This initiative is focused on helping NSW residents that require financial support due to their occupation or family status. The scheme is open to:

  1. Single parents of a dependent child or children
  2. Single people who are 50 years of age or older
  3. First home buyer key workers, including paramedics, nurses, midwives, police officers, teachers, and early childhood educators

If you find yourself within one of these demographics, you also need to meet the below criteria to receive assistance:

  • You are 18 years old
  • You are an Australian or New Zealand citizen, or a permanent resident of Australia
  • You do not currently own a home or any land
  • You will occupy the home as your principal place of resident
  • You have a minimum deposit of 2% of the purchase price
  • As an individual, your gross income is no more than $90,000
  • As a couple, your combined income does not exceed $120,000
  • You would not be able to service the mortgage or purchase the property without this Government contribution

If you want to buy in Sydney or any major regional centres (Illawarra, Newcastle, Lake Macquarie, Central Coast, and North Coast of NSW), the property’s value cannot exceed $900,000. If you hope to buy in other areas within the state, the home cannot cost more than $600,000.

Maximising First Home Buyer Benefits in NSW

If you are an aspiring homeowner struggling to navigate the complexities of buying your first home, we hope this guide helps. As one of Sydney’s leading mortgage brokers with a deep understanding of the property market, we understand the stresses and difficulties of purchasing your first home. With this guide, we wanted to highlight that multiple NSW property incentives and grants are available to make buying a home easier for you.

With multiple first home buyer grants available in NSW, we recommend researching the benefits of each scheme and figuring out if you are eligible before you apply. By understanding the financial assistance available, you can remove a lot of the financial burden of buying your first home and focus on landing the house of your dreams.

If you still need help navigating the application process or require the advice of a professional mortgage broker, reach out to our experts at Lendstreet. We can provide everything you need to make the right decision and purchase the home you deserve.

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