First Home Buyer Benefits

Posted byArman

A lot of our customers are first home buyers. We like them and we want to help them grow their personal wealth through property.

In this article, we will outline the main government benefits available to first home buyer benefits, with a particular focus on New South Wales (NSW). Details for other states and territories can be obtained from www.firsthome.gov.au.

Generally speaking, to get the benefits you need to be buying the property to live in it. So if you are a first property buyer, but not a first home buyer (home = you live there), generally speaking you do not qualify.

Let’s explore 4 different categories of home buyers, what benefits they receive, and what the key requirements are (in NSW):

Buying an established property

  1. You can get stamp duty waived if the property price is no more than $650,000 (saving you $24,740).
  2. You can get the stamp duty reduced if the property price is more than $650,000 but less than $800,000.
  3. Bargain hunters will be pleased to know that the biggest stamp duty savings is if the property is exactly $650,000. For example if the property is $700,000, the discounted stamp duty is $10,490 and the savings is $16,500.
  4. You, and your spouse or partner, must never have owned or co-owned residential property in Australia.
  5. You, and your spouse or partner, must never have received an exemption or concession under this scheme.
  6. At least one of the first home buyers must be an Australian citizen or permanent resident.
  7. You or one of the other first home buyers must move into the home within 12 months after the settlement date and live there for at least 6 continuous months.
  8. The official name of this scheme is the First Home Buyer Assistance Scheme (FHBAS).

Buying a brand new property

  1. You can get the same stamp duty waiver/reduction as someone who is buying an established property above.
  2. You can also receive a grant of $10,000 if the property price is no more than $600,000. This grant can be used as part of your funds to complete (deposit), however usually it cannot be counted as part of your “genuine savings”. There are lenders who do not need genuine savings and your mortgage broker can help if you do not have at least 5% genuine savings.
  3. The other eligibility criteria for the $10,000 grant is substantially the same as the eligibility criteria for the FHBAS. You and your spouse/partner must never have owned or co-owned residential property in Australia (unless you owned or co-owned it on/after 1 July 2000 and did not live in it for a continuous period of at least 6 months). You and your spouse/partner must never have received a first home owner grant in Australia. At least one of the first home buyers must be an Australian citizen or permanent resident. You or one of the other first home buyers must move into the home within 12 months after the settlement date and live there for at least 6 continuous months.
  4. A brand new home is when this is the first time the property has been sold, and the property has never been lived in before, including by the builder or a tenant. It includes most off-the-plan apartment units, a substantially renovated home and a home built to replace demolished premises.
  5. This $10,000 grant is part of a scheme officially called the First Home Owner Grant (New Homes) Scheme (FHOG).

Buying a vacant land

  1. You can get stamp duty waived if the land price is no more than $350,000 (saving you $11,240).
  2. You can get the stamp duty reduced if the land price is more than $350,000 but less than $450,000.
  3. These benefits are part of the FHBAS, so the eligibility criteria are similar as the FHBAS to buy an established property. You must move into the home within 12 months of the completion of construction.

Building a brand new property

  1. You can get the stamp duty waiver/reduction if you qualify as above.
  2. You can also receive a grant of $10,000 if the total value of the property (including the land and building) is no more than $750,000. This grant will be paid on the date of first progress payment by the lender.
  3. The $10,000 grant is part of the FHOG scheme, so the eligibility criteria are similar as the FHOG to buy a brand new property. You must move into the home within 12 months of the completion of construction.
  4. Owner builder is acceptable.

What now?

As can be seen, there are huge benefits available to a first home buyer buying their first property to live in. Check out our article on How to Purchase a Residential Property to get started.

This article was written on 15 February 2019 and reflects the government schemes as of that date. First home buyer schemes change regularly so please check the current schemes on www.firsthome.gov.au. This article is general in nature and is not to be relied upon. You must seek advice from your solicitor.