From 1 July 2023, The NSW Government’s First Home Buyer Choice (FHBC) will no longer be available. Instead, the NSW Government has expanded the First Home Buyer Assistance Scheme (FHBAS) by increasing the transfer duty exemption threshold for new and existing home purchases by eligible first home buyers.
This means that, from July 1st, the transfer duty exemption threshold for new and existing home purchases by eligible first home buyers will increase from $650,000 to $800,000, and the concessional rate will increase from $800,000 to $1 million.
If you are purchasing vacant land on which you intend to build a home, you may receive an exemption for land valued up to $350,000 and a concessional rate for land valued over $350,000 and less than $450,000.
Fairer Stamp Duty for first home buyers
The First Home Buyers Assistance Scheme will create fairer, simpler stamp duty concessions ensuring 84% (or 5 out of every 6 future first home buyers) will pay no tax or at a significantly reduced rate. This means that a first home buyer purchasing a property at $800,000 will save up to $31,090 under the new changes implemented by the Labor Government.
The First Home Buyers Assistance Scheme explained
So who exactly will be able to benefit from the new First Home Buyer Assistance Scheme and how does it work? Here are the answers to your most pressing questions.
What is it?
These new changes to the First Home Buyers Assistance scheme will result in a simpler, fairer system than the FHBC, where first home buyers purchasing properties at the top of the range received a disproportionate share of the benefits.
This new expanded scheme means that first home buyers in NSW will save thousands on Stamp Duty or even avoid Stamp Duty altogether.
People buying their first home in regional centres including Coffs Harbour and Albury where the median house price is between $650,000 and $800,000 will no longer pay stamp duty under the new scheme.
The legislation will also improve the integrity and targeting of first home buyer assistance programs, increasing the requirement to live in the home from 6 months to 12 months.
Legislation will include grandfathering provisions so first home buyers who opted into the annual property tax can continue to pay that tax until they sell their property.
This policy will deliver help to the first home buyers most at risk of leaving the housing market altogether as interest rates go up.
Who is eligible?
NSW Treasury expects about 8600 first home buyers will pay no stamp duty in the next year under the changes, while about 4400 will pay a concessional rate – based on the current housing market.
To be eligible for the First Home Buyer Assistance Scheme, you must meet the below criteria:
- Be aged over 18 years old*
- You must be an individual (not a company or trust*)
- The property value must be within the threshold amounts (up to $800,000 to avoid Stamp Duty)
- The transfer must be for the whole property
- You and your spouse/partner must never have owned or co-owned residential property in Australia
- You and your spouse/partner must never have previously received an exemption or concession under the scheme
- At least one of the first home buyers must be an Australian citizen or permanent resident
- For new or existing homes, you must meet the requirements for living in the property.
*This requirement may be waived upon application. Please contact Revenue NSW for more information.
What are the property value and thresholds?
From 1 July 2023:
| Property value |
Exemption |
|
| New and existing homes |
Value is equal to or less than $800,000 |
You are eligible to avoid Stamp Duty on your house |
| Value is above $800,000 and less than $1 million |
You are eligible for a concession on Transfer Duty rate |
|
| Vacant land |
Value is equal or less than $350,000 |
You are eligible to avoid Stamp Duty |
| Value is above $350,000 and less than $450,000 |
You can apply for a concessional Transfer Duty rate |
How to apply for the First Home Buyers Assistance Scheme (FHBAS)
After you have exchanged contracts, you can apply for the FHBAS by downloading and completing the relevant forms on the NSW Revenue website.
Helpful links to find out more
Here are some links which provide more information on the changes:
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.
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