Incentives for first home buyers – NSW

First Home Buyers Incentives – NSW

First home buyers in New South Wales may be eligible for stamp duty savings. They may also be eligible for assistance under the First Home Buyers Assistance Scheme and/or the First Home Owners Grant (New Homes).

Together, these New South Wales Government initiatives provide grants, exemptions and concessions to assist eligible first home buyers. They form part of the reforms delivered in the 2017 budget to improve housing affordability.

How do first home buyers benefit under the Schemes?

The First Home Buyers Assistance Scheme commenced on 1 July 2017 and provides concessions and exemptions from stamp duty for eligible first home buyers. Therefore, as a result, these incentives may make entering the property market more attainable for first-time buyers.

Consequently, the Scheme abolished stamp duty on all homes (new and existing) with a purchase price of up to $650,000 for eligible first home buyers. This represents considerable duty savings – around $24,740 on a $650,000 purchase.

Concessions are also available on homes priced between $650,000 and $800,000 for eligible buyers. Importantly, these concessions are calculated on a sliding scale and gradually decrease as the property value nears $800,000.

Furthermore, no duty is payable on vacant land to the value of $350,000 which is to be used to build the first home, with concessions on duty available for land valued between $350,000 and $450,000.

The First Home Owners Grant (New Homes) provides eligible first home buyers with a one-off grant of $10,000 if building a new home to the value of $750,000, or if purchasing a new property to the value of $600,000.

Am I eligible?

The stamp duty exemptions and grants apply to contracts entered on or after 1 July 2017.

In short, a first home purchase means a property which you (or another eligible purchaser) will occupy for a continuous period of six months, within twelve months of settlement. Exemptions from this requirement apply for certain Australian Defence Force personnel.

To qualify, purchasers must be natural persons (not purchasing through a company or trust) and at least 18 years of age. The purchaser and purchaser’s spouse or de facto partner must not have previously received a concession or exemption under a First Home Buyers Scheme or owned residential property in Australia unless the property was held solely as an executor or trustee.

At least one of the purchasers must be an Australian citizen or permanent resident at the time of the contract or transfer.

In addition, Applicants need to meet Proof of Identity requirements and complete the relevant declaration.

Further savings and changes under the reforms

The reforms also abolished insurance duty on lenders’ mortgage insurance which represents considerable savings, not just for first home buyers.

Mortgage insurance generally allows borrowers with less than 20% deposit to obtain a home loan. This is often the case for first home buyers. As a result, the insurance protects the lender if the borrower cannot repay the loan and the property needs to be sold. With the elimination of insurance duty, buyers who are required to take out mortgage insurance for a home valued at $800,000 are around $2,900 better off.

The reforms also introduced speedier development approval processes and plans to build compact ‘smarter’ homes in appropriate medium-density areas to improve housing supply and affordability, particularly for those first entering the market.

The State Government also budgeted for significant funding boosts for infrastructure and capital works to support increased demands by additional housing supplies.

Why were these incentives introduced?

The reforms were introduced to alleviate some of the competition between investors and first home buyers who are generally hard-pressed to buy property in a competitive market.

Above all, the reforms aim to even up the playing field a little more by increasing the incentives for first home buyers and hitting certain investors who buy residential property with higher taxes and duties.

For foreign investors, the surcharge on stamp duty doubled from 4% to 8% and land tax increased from 0.75% to 2%

Investors of off-the-plan properties, whether local or foreign, must now pay stamp duty within three months of exchanging contracts rather than deferring payment for fifteen months, as is generally the case for off-the-plan purchases.

Off-the-plan purchasers intending to use the property as their main residence are still entitled to defer payment of stamp duty for fifteen months from the exchange.


In conclusion, whether you are a first home buyer or investor, it is important to understand the impact of stamp duty and taxes on a potential property purchase.

Furthermore, your lawyer can assist in determining your eligibility for stamp duty concessions and grants and help you with the conveyancing process.

If you or someone you know wants more information or needs help or advice, please contact us on 02 9955 6692 or email