First time buyers of new property in NSW may receive grants and stamp duty exemptions worth up to $35,000 from 1 October 2012; thus providing an opportunity to enter the property market.
With a cash grant of $15,000 and stamp duty exemption of up to $20,000 it is currently possible for first time buyers with a modest deposit savings to become property owners.
There are two components to the concessions:
First Home Owner Grant (FHOG)
From 1 October 2012, first home buyers purchasing new residential property below $650,000 are eligible to receive a Government grant of $15,000 upon settlement.
First home buyers purchasing second hand properties are no longer eligible to receive a grant of any amount.
The FHOG will decrease to $10,000 from 1 January 2016.
What is a new home?
A new home is:
- A home that has not been previously occupied, including occupation by the builder, a tenant or other occupant.
- A home that has not been previously sold as a residence. Where the home is being purchased, it must be the first sale of that home
- A home that has been substantially renovated and a home built to replace demolished premises.
Am I eligible?
To be eligible for the $15,000 grant:
- The contract date must be on or after 1 October 2012;
- The home is a brand new home;
- You are over 18;
- You or your spouse (including de facto spouse) have never held a relevant interest in any residential property in Australia prior to 1 July 2000. However, you may be eligible if you or your spouse, including de facto spouse, have only had a relevant interest in any residential property in Australia on or after 1 July 2000 and you have not resided in that property for a continuous period of at least 6 months;
- The value of the property must not exceed the First Home Owner Grant Cap of $650,000;
- You have not received a first home owners grant in any State or Territory, unless subsequently repaid;
- You need to live in the home for a continuous period of at least 6 months;
- At least one applicant is a permanent resident or Australian citizen;
- Each applicant must be a natural person and not a company or trust.
First Home Stamp Duty Exemption
From 1 October 2012 first home buyers purchasing new property below $550,000 or vacant land below $350,000 will be exempt from paying stamp duty.
First home buyers purchasing new property from $550,000 to $650,000 or vacant land from $350,000 to $450,000 will be eligible to receive discounts on stamp duty.
| Stamp duty concession | Purchase price | Property type |
|---|---|---|
| Exempt | up to $350,000 | Vacant land to build |
| Exempt | up to $550,000 | New only |
| Discount* | $350,000 to $450,000 | Vacant land to build |
| Discount* | $550,000 to $650,000 | New only |
* Stamp duty discounts are calculated based on purchase price. For each additional $1,000 in cost above the stamp duty exemption threshold the full exemption will be reduced by 1%. Example: a new home purchased for $560,000 ($10,000 above threshold) would receive a 90% discount on the applicable stamp duty.
If you are looking to become a first home owner and want some clear and unbiased advice about your options here contact us.