For first homebuyers, the prospect of entering the property market can often feel overwhelming. Recognising this challenge, the NSW government has implemented various assistance schemes and changes to first home buyer policies to make it easier for people to enter the property market. These changes include an increase in the stamp duty discount threshold, revisions to existing first home benefits and the removal of the First Home Buyer Choice.
In this article, we cover the changes to NSW government incentives and guide you through what you may be eligible for to help you save money and purchase your first property sooner.
First Home Buyers Assistance Scheme
The First Home Buyers Assistance Scheme helps individuals enter the property market. When applying for a home loan, it’s essential to consider the revisions to this scheme.
Stamp duty, also known as transfer duty, is a tax the government charges on property transactions. However, it may not apply to you. The First Home Buyers Assistance Scheme offers full or partial exemption on transfer duty.
One of the most significant changes is the increase in the stamp duty discount threshold for first home buyers. Previously it was $650,000, but it has now increased to $800,000. This means savings of up to $30,735 on a property purchase of up to $800,000 where no stamp duty is payable. For property purchases between $800,000 and $1 million, first home buyers could be eligible for a concessional rate on stamp duty rates.
Previously, a homeowner was only required to live in their new home for at least 6 months. This requirement has now increased to a period of 12 consecutive months, and you must also move into the property within a year of settlement.
The First Home Guarantee
The First Home Guarantee (FHBG) is part of the Home Guarantee Scheme (HGS), an Australian Government initiative to support eligible home buyers to buy a home sooner. This scheme allows qualified first home buyers to purchase a property with a deposit of as little as 5 percent of the purchase price without needing to pay Lender’s Mortgage Insurance (LMI). This scheme makes it easier for first-time buyers to enter the market.
First Home Buyer Choice
Former NSW premier Dominic Perrottet implemented an alternative to stamp duty, the First Home Buyer Choice (FHBC), allowing first home buyers buying properties under $1.5m to pay an ongoing annual tax. However, the current Labor government have repealed this decision, which is no longer an available option. First home buyers who opted into the FHBC before the 1st of July won’t be affected by this change.
If you are a first home buyer in NSW, these changes could make getting into the property market easier. Simplify Finance can help you determine if you’re eligible for any of these schemes and can help you get the financing you need to buy your first home. Contact us today to learn more.