What government incentives are available for a first home buyer?

With property prices skyrocketing, the NSW Government offered a couple of incentives to First Home buyers in New South Wales – the “First Home Owner Grant (New Homes) scheme” and the “First Home – New Home Scheme”.

The eligibility criteria for the 2 schemes available are generally the same.

It must be your first home, and a new home.

You must be a natural person who is over 18 years of age and either an Australian citizen or permanent resident, and the agreement must be for the purchase of the entire property. If you are purchasing your property with another one or two or more purchasers, each of you must be over 18, but only one of you needs to be an Australian citizen or permanent resident.

Even if you meet the above requirements, you may not be eligible if your partner (married or de facto), who may not even be a party to the transaction, have previously owned property in any form in any State or Territory or previously received an exemption or concession under this Scheme.

For both incentives – any new homes over $650,000 are not eligible.

First Home Owner Grant (New Homes)

If you are an eligible purchaser, and the property you are purchasing does not exceed the First Home Owner Grant cap of $650,000, you can lodge an application for this grant within 12 months of completion or settlement of your new property.

$15,000 will be directly deposited into a bank account of your choice.

Note that if you receive this grant, and then later fail to meet eligibility requirements, such as living in the property for 6 months post-settlement, you will have to pay back this grant.

First Home – New Home Scheme (NSW)

This scheme relates to the stamp duty liabilities to be paid by the purchaser. There are a few important questions to ask in relation to the First Home – New Home Scheme.

Firstly, does the property fall within the threshold? An exemption on transfer duty is available for any new homes which are under $550,000, and a concession is available for new homes which are valued over $550,000 but under $650,000.

Secondly, how do you apply? Contracts must have already been exchanged between you and the vendors. You can then apply directly to the Office of State Revenue.

And finally, do you have to live in the property? The answer is yes. If you have purchased this property with other people, at least one of you must occupy the new property within 12 months of settlement/completion and also live there for a continuous period of at least 6 months.

It is important to discuss your eligibility with your lawyer as you could be saving a significant amount on your purchase. Your lawyer will have a copy of the contract and necessary details at hand and will be able to assist you in lodging applications with the Office of State Revenue.