What Government Assistance is Available To First Home Buyers in NSW?

Keeping track of all the government assistance for first home buyers in NSW can be challenging, particularly with the recent addition of two new schemes: the First Home Buyer Choice and Shared Equity Home Buyer Helper.

All these government schemes are designed with one purpose in mind: to get you on the property ladder faster. As such, it definitely pays to be aware of all the support available.

Read on to discover more about all the current grants, schemes and concessions available to NSW first home buyers as of 2023.

State initiatives

First Home Owner Grant

Are you planning to buy a new home worth up to $600,000 or a house-and-land package with a combined value of $750,000 or less?

Well, you could be eligible for the First Home Owner (New Homes) Grant – a one-off payment of $10,000. Many first home buyers put this lump sum towards their deposit, but the money can be spent as you wish. The grant is not taxable and doesn’t have to be repaid.

First Home Buyer Assistance Scheme

Stamp duty is one of the largest upfront costs of buying property in NSW, adding tens of thousands of dollars to the final bill. Fortunately, eligible first home buyers purchasing a property worth less than $650,000 pay no stamp duty under the NSW government’s First Home Buyer Assistance Scheme.

And if you buy a property valued between $650,000 and $800,000, you might qualify for a stamp duty discount based on the value of your home.

First Home Buyer Choice

There’s another way NSW first home buyers can avoid stamp duty.

Thanks to the new First Home Buyer Choice, first home buyers can now opt out of upfront stamp duty in favour of paying a smaller, annual property tax when they buy a property worth up to $1.5 million.

The annual levy is based on the land value of the property, with the rates for 2022-2023 and 2023-2024 set as:

• $400 plus 0.3% of land value for owner-occupiers
• $1500 plus 1.1% of land value for investors

Shared Equity Home Buyer Helper

If you are employed as a key worker or are a single parent or single aged 50 years or older, you may be eligible for the NSW government’s new shared equity scheme.

Shared Equity Home Buyer Helper lets you buy a property with just a 2% deposit while avoiding lender’s mortgage insurance (LMI), as the NSW government will contribute up to 40% of a new home’s purchase price or 30% for an existing home.

In return, the government gets an equivalent interest in the property – though you don’t have to make any repayments on the government’s share, and won’t get charged interest or rent.

National initiatives

Home Guarantee Scheme

Previously known as the First Home Loan Deposit Scheme, the federal government’s Home Guarantee Scheme helps you buy a property with a low deposit without paying LMI.

From 1 July 2022, there are 50,000 places available each financial year made up of:

• 35,000 First Home Guarantees: These help eligible first home buyers purchase a property with a deposit of as little as 5%
• 10,000 Regional First Home Buyer Guarantees: These help eligible regional first home buyers purchase a home in a regional area with a deposit of as little as 5%
• 5,000 Family Home Guarantees: These help single parents with at least one dependent child buy a home with a deposit of as little as 2%

First Home Super Saver Scheme

The First Home Super Saver Scheme lets you make pre-tax or after-tax voluntary contributions into your superannuation account to save a deposit, up to a maximum of $15,000 per year (with a maximum lifetime cap of $50,000). These contributions will then be taxed at 15%, instead of your regular income tax bracket.

Do you want to buy your first home in 2023? Shore Financial can help. To discuss your options, call us on 1300 416 700, email us on info@shorefinancial.come.au or fill in this online form.