What First Home Buyer Incentives Are Available In NSW In 2021?
If you’re buying your first home in NSW, are you aware of the different and evolving assistance packages available to you to help you get on the property ladder sooner?
Here is a look at the current packages available to first home buyers in NSW and the changes that are coming into effect for the First Home Buyer Assistance Scheme from the beginning of August.
1. First Home Buyer Assistance Scheme and changes from August 1 2021
In 2020, the NSW Government increased the transfer (stamp) duty thresholds for the purchase of new homes and vacant land, however from 1 August 2021, the thresholds revert to the previous threshold amounts.
Outlined below are the stamp duty thresholds that will apply from 1 August 2021
- Buy a new home valued at less than $650,000, apply for a full exemption and pay no transfer duty
- Buy a new home valued between $650,000 - $800,000 and apply for a concessional transfer duty rate. The amount will be based on the value of the home
- Buy an existing home valued at less than $650,000, apply for a full exemption and pay no transfer duty
- Buy an existing home valued between $650,000 and $800,000 apply, apply for a concessional transfer duty rate. The amount will be based on the value of your home
- You won’t pay transfer duty if your land is valued at less than $350,000
- For land valued between $350,000 and $450,000 you’ll receive a concessional rate
To find out more about the First Home Buyer Assistance Scheme, whether you are eligible and how to apply click here.
2. First homeowner grants
The NSW government will continue to offer a $10,000 first homeowner grant, which is available to people buying a new first home worth no more than $600,000 or buying land and building a new first home worth no more than $750,000 in total.
This means the maximum benefit a homeowner could be entitled to is $32,335 if purchasing a new home and accessing the grant.
Some of the key conditions that are required to get the grant are outlined below, however it is important to check with Revenue NSW for more specific requirements.
- You must be a permanent resident or an Australian citizen. If you are buying the property with someone else at least one of you must be a permanent resident or an Australian citizen.
- You must not have previously owned or co-owned a home in Australia or have received an Australian first homeowners grant in the past
- You must be buying a home to live in; it cannot be an investment property
- You are required to live in the home for at least six months after purchase
- You must be a natural person, not a company or a trust and you need to be over the age of 18
3. First Home Loan Deposit Scheme
This is an Australian government funded initiative which partially guarantees some low deposit loans by helping eligible first home buyers avoid paying lenders mortgage insurance.
If a first-time buyer has less than 20% deposit, they will normally be required to pay lenders mortgage insurance which can be quite hefty. However, under this scheme, eligible first home buyers can purchase a modest home, with a deposit as little as 5% (lenders criteria applies) and the Commonwealth Government will guarantee the difference between what the first home buyer has saved, and the 20% deposit threshold lenders usually require before they’ll provide a loan without lenders mortgage insurance. The government says this could save first home buyers as much as $10,000.
As part of the 2021 -22 federal budget, the government has announced from 1 July 2021 an additional 20,000 first home loan deposit scheme places will be available for the 2021 to 2022 financial year.
The government, however, has made some changes and not all properties will be eligible to be purchased under the government's home deposit scheme. The scheme will only underwrite loans for entry properties excluding high value properties. There is no fixed maximum value for properties eligible under the scheme, as price caps will be determined relative to the property’s local market.
Importantly 10,000 of the 20,000 available spaces for this scheme will only be applicable to first home buyers who are looking to build or purchase a newly built home while the remaining 10,000 are allocated for first home buyers looking to purchase an existing property.
The property price threshold varies depending on where you are buying. To find out the property price threshold for the area you wish to buy in click here.
To find out more about applying for the first home loan deposit scheme click here.
4. Bolstering the First Home Super Saver Scheme (FHSS)
While this is a bit further down the track it is worth mentioning. From 1 July 2022, first home buyers can make voluntary super contributions of up to $50,000 into their super. They can then withdraw this amount (plus earnings, less tax) to help with a deposit on their first home. This contribution has been increased from $30,000 following the Federal Budget announcement.
To find out more about the First Home Super Saver Scheme click here.
5. Family Home Guarantee
In an attempt to help single parents achieve financial security for their families, they will now be able to access a Family Home Guarantee which will allow 10,000 eligible applicants over four financial years the opportunity to purchase a home with as little as 2% deposit.
One of the biggest hurdles to get into the housing market for single parents on single incomes is getting their deposit together. The Family Home Guarantee will enable single parents to jump that hurdle.
The program will be a significant help to single parents trying to get into the housing market. While this isn’t only applicable to first home buyers, it’s worth being aware of in case it applies to you.
To find out more about Family Home Guarantee click here.
A final word
If you are a first home buyer in NSW there are a number of grants available to help benefit your financial situation and boost your chances of becoming a homeowner. Plus, the grants have been set up to allow you to apply for multiple, if not all the grants available to you at a state and national level. Ensuring you investigate your options with Revenue NSW and the relevant Federal Government department is critical here. Plus, talk to an Oxygen Home Loan Specialist for expert tailored advice and assistance.
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