Help available to first-time homebuyers in NSW

There are many questions being asked about the property market at the moment. Amidst all the uncertainty, there's one group that is coming to the fore: first-time home buyers.

Data from realestate.com.au, which asks buyers to identify themselves when they make an enquiry, has shown a huge growth in first-time home buyers scouring the market.

There are many reasons for this and one of the most important factors is the wide range of benefits available to first-time home buyers in New South Wales at the moment. These include:

• First-time home buyers' grant
• Increase in stamp duty threshold
• HomeBuilder grant
• First Home Loan Deposit Scheme

First-time home buyers' grant

The NSW Government offers a First Home Owners Grant (FHOG) that provides up to $10,000 for people buying newly-built homes or for building properties on land they already own. This is available for properties and projects worth up to $600,000.

Like most grants for first-time buyers, there are a few stipulations. You must be at least 18, you (or someone you are buying the home with) must be an Australian citizen and you (and anyone else you're buying with) can't have owned (or co-owned) a home in Australia before.       

Increase in stamp duty threshold

First-time home buyers have long been given exemption on some properties in NSW. In recent years, it's been for places valued up to $650,000.

Since August 1 2020, this has changed to remove stamp duty on all newly-build homes up to $800,000 for first-time home buyers. This alone could mean a saving of up to $31,335 – but can be coupled with the $10,000 grant above for extra savings (or triple-dipped with the grant below for even more help).

Houses sold for $800,001 to $1m will have a reduced stamp duty charge. This is a temporary change, valid for one year.

The threshold for vacant land in NSW will also rise from $300,000 to $400,000, with reductions on land valued at up to $500,000.

HomeBuilder grant

On top of all this, HomeBuilder has been made available by the government as a direct response to Covid-19.

This grant of $25,000 is available to people building a new home or undertaking major renovations -- anything that cost $150,000 or more.

This grant is available Australia-wide but has to be applied for through the NSW Government.

First Home Loan Deposit Scheme

The First Home Loan Deposit Scheme (FHLDS) is a government initiative to help people get on the property market more quickly.

Ordinarily, if buyers put down a deposit that was less than 20% of the property's value, they would be subject to Lenders Mortgage Insurance (LMI). This is a one-off payment included in the loan amount that protects the lender should the borrower default on the loan. The smaller the deposit, the higher the LMI payment.

FHLDS gives eligible buyers the option to bring the threshold for their deposit down to 5% of the property's value, for homes up to $700,000.

Help buying a home

There are lots of steps to buying a home and it's easy for a first-time buyer to get confused. If you want help navigating the different options available to you, as well as with reading the finer points of your contract, call East Coast Conveyancing on 1300 327 826 or download our free ebook below.