Move from rent to buy – First home buyer benefits

calendar August 10 2017

It is often said the great Australian dream is to own your home. The initial step to achieve this dream is to purchase your first home. Since 2000, the various State governments have provided assistance to eligible first home buyers.

Assistance can be in the form of lower taxes (purchase stamp duty) and/ or a cash grant. The assistance is reviewed annually in line with the economic situation and government policy. For the past few years assistance has been directed at increasing the supply of newly built dwellings, however from 1 July 2017 the scheme was extended in NSW to include existing dwellings.

NSW first home buyer assistance scheme – from 1 July 2017

The current scheme in NSW provides exemptions or concessions on transfer stamp duty for eligible NSW first home buyers. This includes vacant land on which you intend to build your first home, new-completed dwellings, off the plan purchases and existing dwellings.

Example of how the change makes a positive difference for first home buyers looking to purchase an existing dwelling.

  • In a recent example for an existing dwelling purchased for $442,500 before 1 July 2017, the client had $52,000 funds to contribute and $15,403 was payable in purchase stamp duty. The resultant loan was $418,979 including a lender mortgage insurance (LMI) premium of $12,604.
  • If the same property was purchased after 1 July 2017 the stamp duty would be zero, resulting in a lower LMI premium of $6,486 and final loan $397,262. This is a $21,717 benefit resulting in a lower final loan amount and a lower monthly repayment!
    What are the benefits for eligible first home buyers?

  • Stamp duty is abolished for all homes, existing and new, up to $650,000 for first home buyers.
  • Stamp duty is reduced for all homes, existing and new, between $650,000 and $800,000.
  • A $10,000 grant is provided for builders of new homes up to $750,000 and purchasers of new homes up to $600,000.
  • Eligible first home buyers purchasing a vacant block of residential land to build their home on will pay no duty on vacant land valued up to $350,000, and will receive concessions on duty for vacant land valued between $350,000 and $450,000.
  • Stamp duty (9%) on lender mortgage insurance premiums was also eliminated from 1 July 2017 making this cost cheaper. We will cover LMI in more detail in the next article.

  • To qualify for first home buyer assistance, you must meet the criteria listed on the Office of State Revenue website.

    Call us now for a discussion about your situation and to check eligibility for the First Home Buyers Assistance. We can provide an obligation free assessment of your borrowing capacity and what you need to contribute to purchase your home.

    Information sourced from the NSW Office of State Revenue 02/08/2017

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