The NSW Housing Affordability Package for First Home Buyers

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In 2017, the NSW Government announced a new package of measures that will help first home buyers get into the market. The package aims to address the difficulty that first home buyers face in entering the property market.

Abolition of stamp duty on all homes up to $650,000 and stamp duty relief for homes up to $800,000

Under the new package, stamp duty will be scrapped for properties up to $650,000 – new or established. This exemption can save the first home buyer up to $24,740 on a $650,000 home. The new package also provides a $10,000 grant for builders of new homes up to $750,000 and purchases of new homes up to $600,000. 

First home buyers buying a block of land and building a house can qualify for the $10,000 first home owners grant on completed homes worth up to $750,000.  There is no stamp duty for land purchase of $350,000 and below.   Construction does not attract stamp duty.  If land purchase price is between $350,0001 and $450,000, there is stamp duty concession.  The calculator from the NSW Office of the State Revenue can help you calculate the stamp duty that you will have to pay. 

A first home buyer purchasing a newly built off the plan property up to $600,000 can qualify for the $10,000 first home owners grant and the full stamp duty exemption.

Scenario 1:

First home buyer is purchasing an off the plan property for $600,000. In this scenario, the first home buyer is qualified for the $10,000 grant and the full stamp duty exemption.

Scenario 2:

First home buyer is purchasing an established unit for $650,000. First home buyer is qualified for the full stamp duty exemption but will not qualify for the $10,000 grant. 

Scenario 3:

First home buyer is purchasing a block of land for $400,000 and building a house for $350,000.  First home buyer will have to pay $7,870 stamp duty for the block of land as its price is above $350,000.  There is a saving  of $5,620 because the land price is between $350,001 to $450,000.  Use the calculator from the NSW Office of the State Revenue to calculate the stamp duty you will have to pay. Because the total price of the land and the house is $750,000, first home buyer can qualify for the first home owners grant of $10,000.

Abolish insurance duty on lender’s mortgage insurance

For first home buyers with very little deposit (5% genuine savings is still required), the only way they can purchase their first home is to borrow up to 95% of the purchase price.  Borrowing more than 80% of the value of the property attracts loan mortgage insurance, a premium the borrower pays for not having at least a 20% deposit. This is a one-time payment which can be put on top of the loan. A 9% insurance duty is imposed on loan mortgage insurance. This removal of duty will save all home buyers (first home buyers or not) money if they need loan mortgage insurance. This can still amount to thousands in savings.

You can find more details about the NSW government’s housing affordability strategy here.

Still confused? Let us call you to discuss your home loan needs.  Our job as your finance broker is to explain what grants, stamp duty exemptions and concessions you can qualify for.  Leave your details below and we’ll be in touch!

The schemes and grants available to help first home buyers

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