16 Mar New purchasing options for NSW first home buyers

Posted at 12:30h in Buyers Agent by

NSW first home buyers have some exciting new options which can reduce the amount of money they must contribute to purchasing costs.

NSW first home buyers now have a great opportunity to get into the property market in 2023 with the new government assistance packages. Specifically, the NSW government has introduced:

1. The First Home Buyers Grant

2. The First Home Buyers Assistance Scheme

3. The First Home Buyers Choice Scheme

The biggest change is The First Home Buyers Choice Scheme, which now applies to higher priced properties up to $1.5 million.

If you’re planning to make a Sydney property purchase in 2023, here is a breakdown of the potential incentives and grants you can take advantage of.

1. What Is The First Home Buyers Grant?

This is a $10,000 grant that can be accessed when you buy or build your first new home (the grant is not for established homes). 

To be eligible, the maximum purchase price is $600,000. If you buy land and sign a builders contract to build your house, the maximum price is $750,000.

2. What is The First Home Buyers Assistance Scheme?

The first home buyers assistance scheme is currently in place for NSW buyers purchasing a new or existing home.

Buyers:

  • Pay no stamp duty up to $650,000
  • Pay tiered stamp duty on properties / land priced between $650,000 – $800,000

For more information  about the schemes, refer to the First home buyer grants and assistance information page on the NSW Government website.

3. What Is The First Home Buyer Choice Scheme?

This scheme is for NSW first home buyers purchasing a property up to $1.5 million. These property buyers now have the option to choose between paying  an annual property tax or a one off stamp duty fee. 

The appropriate choice will depend on your ownership intentions.The amount of property tax payable depends on whether you are purchasing an investment property or a home to live in.

Annual property tax payments are based on the land value of the purchased property. The property tax rates for 2022-2023 and 2023-2024 will be: 

  • Home Owners  – $400 plus 0.3% of land value for properties whose owners live in them 
  • Investors – $1500 plus 1.1% of land value for investment properties. 

 Calculate your estimated property tax here: Service NSW Property Tax Calculator.

You can also find more details about the First Home Buyer Choice by visiting nsw.gov.au.

Am I Eligible for the First Home Buyers Choice Scheme?

To be eligible you must:

  • Be over 18
  • Be an individual, not a company or trust
  • Have never owned or co-owned residential property in Australia (this includes partners and spouses)
  • Have never received an exemption or concession under this scheme (including partners and spouses)
  • Be an Australian citizen or permanent resident (at least one member of a partnership)

You will also be required to move into the purchased property within 12 months of buying it and make it your primary residence for at least six continuous months. 

Should I Choose Land Tax or Stamp Duty ?

To help you make your decision between paying the upfront stamp duty or the ongoing land tax payment, here are some questions to think about and discuss with your mortgage broker/financial adviser.

How long do you plan to hold the property?

If you only intend to remain in your first home for a few years, it makes sense to choose the annual land tax fee because you will only have to pay it a few times.

If you hope to live in the home for a longer period, it can be more cost effective to pay the lump sum transfer duty and have one less bill to deal with in the future.

Are you buying a house or an apartment?

If you are buying an apartment, the land tax is lower than for a freestanding house, so it may be best to choose the annual fee.

What are you paying for your property?

Your property purchase amount will also impact your decision. To find out which options better suit your needs head to the Service NSW Property Tax Calculator.

What Other Expenses Are There ?

When making your decision, don’t forget that the price of the property and stamp duty are not the only costs.

Realestate.com.au lists the hidden expenses of buying a home as follows:

  • Building inspection and pest inspection
  • Mortgage registration fee
  • Transfer fee (Stamp Duty)
  • Loan application fee
  • Lenders mortgage insurance
  • Council and water rates
  • Conveyancing and legal fees

Need Help ?

Buying your first home is a big decision. Making the right property purchase is paramount.  

An expert Buyers’ Agent can protect your hard earned savings by making sure your first home purchase is the right home at the right price in the right location. We save you money and we make sure you buy the right property so our fee should at least be cost neutral.

We have you covered in every aspect of your property buying journey with our trusted network of mortgage brokers, conveyancers, financial planners and lawyers. Our holistic approach provides you with the security, confidence and support  to make the right decisions.

For more information about First Home Buyer Assistance Schemes read our recent article.

To start your property journey contact us today and find out about our Premier Home Finders First Home Buyers Package.