Two state government schemes designed to encourage property ownership have now made buying your first home in NSW more attractive.
The State Government will provide $10,000 under the First Home Owners Grant to applicants who are planning to purchase either a new property or one that has been substantially renovated.
It has also eased the burden of stamp duty on first-time buyers under a program called the First Home Buyers Assistance.
Let’s start with the grant: Like any government scheme, this one has a set of criteria that all applicants must meet. I have listed these below. Applying for a grant is relatively simple, and if you use a mortgage broker, they will be able to help you with that.
As your local real estate agent, I have helped many individuals, couples and young families secure their first properties thanks to assistance from grants similar to this.
The State Government has recently moved on a second front, easing the burden of stamp duty under the First Home Buyers Assistance scheme.
The NSW Government now refers to stamp duty as “transfer duty” to reflect the fact it charges this levy for moving ownership from one party to another. Really, though, it’s a new name for an existing tax.
Reductions in transfer duty apply only to new homes, and vacant land purchased to build a residential property.
It was launched on August 1, 2020, and is available for one year only. It is designed to help younger Australians into the property market and boost the construction and housing sectors in the middle of the Covid crisis.
Transfer duty is calculated on a sliding scale and, therefore, your saving will depend on the value of the property that you intend to purchase.
If your intended purchase is less than $650,000, you can apply to be exempt from paying the tax – a saving of around $25,000.
A property valued $650,000 to $800,000 can receive a tax discount, potentially saving up to $32,000. The program phases out for properties valued at $1 million or more.
The threshold has also shifted advantageously – from $350,000 to $400,000 – on vacant land purchased to build a home.
In addition to this state government support, you may also be eligible for the promised $25,000 grant from the Federal Government for owners – including first-home buyers – to renovate an existing residence substantially. This has been aimed at bolstering the construction industry amid the pandemic.
If you’re interested in knowing more, contact me and I will try to find properties that might meet your needs.
In the meantime, here are some of the basic rules around the $10,000 First Home Owners Grant:
- If the home is ready to move in, then the intended purchase must be less than $600,000.
- It should be a new construction or “substantially renovated”. This means most or all of the original home has been replaced, and that it has not been sold or occupied since that work was completed.
- If you plan to build a new home, then the combined value of the house and land must be less than $750,000.
- You can use the grant as a contribution to your deposit.
- The grant is not available to a trust or company.
- Applicants must be aged 18 or over.
- At least one of the applicants must be a citizen or possess permanent residency.
- You cannot have owned a property previously, although some exceptions are made.
- You must occupy the property for at least six months within a year of the purchase, or once the construction has been completed.