First Home Buyer Sydney – Guide to the First Home Buyer Scheme in NSW

As a First Home Buyer in Sydney, it’s essential to understand the importance of the First Home Buyer Scheme. This scheme offers valuable assistance to help you buy your first home with low interest rates.

Let’s explore how this benefits First Home Buyers as we break it down for you in a clear and simple way. 

Types of First Home Buyer Schemes

The First Home Buyer Schemes offer various financial assistance initiatives to help individuals purchase their first homes, providing savings on upfront costs and offering flexibility to suit individual situations. 

1. First Home Buyers Assistance Scheme (FHBAS) 

This scheme involves the exemption, either in full or partially, from paying stamp duty, also known as transfer duty. 

Age and Residency 

• You must submit application as an individual, not by companies or trusts. 
• Your age must be over 18 years. 
• At least one applicant (either you or your spouse/family member) must be an Australian citizen or permanent resident. 

First-Time Buyer Status 

• You must not have a record of owning any property in Australia before. 
• You and your spouse/family member/friend must not have owned a house in Australia or received an Australian first home buyer grants before. 

Property Type & Purchase Limit 

• For new and established homes, the property value must be less than $800,000 to receive a concessional rate on transfer duty. For a full stamp duty exemption, the property value must be less than $650,000. And more importantly, the home you buy must be either newly constructed or substantially renovated.  
• For vacant land, the land value must be less than $450,000 for a concessional rate on transfer duty or less than $350,000 for a full exemption. 

Residency Requirement 

• At least one of the first home buyers must move into the home as their primary residence within 12 months of purchase and live there continuously for at least 6 months. 

2. First Home Owner Grant (FHOG) 

You can obtain $10,000 to assist with your property acquisition. This grant can be utilised alongside the benefits provided by the First Home Buyers Assistance Scheme.  

Please note that these particulars pertain specifically to the NSW Government application of the First Home Owner Grant (FHOG) or the First Home Buyer Grant, which presents distinct restrictions and advantages compared to other states. 

Eligibility Criteria  

The eligibility criteria to avail of the FHOG Scheme is as follows: 

Age and Residency 

• Applicants age must be over 18 years. 
• At least one applicant must be an Australian citizens or permanent residents. 

First-Time Buyer Status

• Applicants must not have previously owned property in Australia. 

Property Type & Purchase Limit 

This option provides more flexibility. You get to choose between paying the upfront transfer duty or opting into an annual property tax instead.  

• Starting from 1 July 2023, individuals purchasing either new or existing homes valued up to $800,000 will be eligible for a full exemption from transfer duty. Homes valued over $800,000 but less than $1,000,000 ($1 million) may qualify for a concessional rate.  
• For those buying vacant land with the intention of building a home, an exemption will be granted for land valued up to $350,000. Land valued over $350,000 but less than $450,000 may qualify for a concessional rate. 

Residency Requirement

• At least one of the first home buyers must move into the home as their primary residence within 12 months of purchase and live there continuously for at least 6 months. 
• You may still qualify for this scheme if you’ve owned a residential property before but haven’t resided in it for more than 6 months.

3. Shared Equity Scheme (Shared Equity Home Buyer Helper)

In this first home buyer scheme, the NSW Government will provide up to 40% of the purchase price for a new home and up to 30% for an existing home in exchange for a corresponding interest in the property.  

Participants in the scheme are not required to make any repayments to the government for as long as they remain eligible. However, voluntary contributions can be made to enhance equity in the property. 

Note: While this scheme is a great option for first-time purchasers, it’s important to note that it’s not limited to first home buyers. Single buyers over the age of 50 and single parents can also utilise this scheme to help them achieve homeownership. 

Eligibility Criteria  

You should meet the below criteria to be eligible for the shared equity scheme: 

Age and Residency 

   Applicants age must be over 18 years old. 

   At least one applicant must be an Australian citizen or permanent resident. 

First-Time Buyer Status 

   Applicants must not have previously owned property in Australia. 

Occupational Requirement 

   First-home buyers must be one of the key workers: employed as early childhood educators, teachers, nurses, midwives, paramedics, or police officers. 

Income Limits 

Gross income limits vary for singles and couples.  

   For single: Gross income must be less than $90,000. 

   For couples: Gross income must be less than $120,00. 

Property Type & Purchase Limit 

   For Sydney and regional centres, the property value must be less than $950,000. 

   For the rest of NSW, the property value must be less than $600,000. 

Minimum Deposit 

   – Applicants must have a minimum deposit of 2%. 

Note:  

  These schemes do not apply to investment properties; purchasers must have the intention to reside in the property.   

  In the case of an applicant being a member of the Australian Defence Force, the obligation to reside in the established home continuously for 6 months may be waived. 

4. First Home Guarantee Scheme (First Home Buyers Guarantee)

In this scheme, the government allocates 35,000 positions annually for qualifying first-home buyers to secure a home with a deposit as low as 5%. The government covers the remaining deposit, eliminating the need for LMI. 

Eligibility Criteria  

Please ensure that you meet the following criteria to be eligible for the first home guarantee scheme: 

Age and Residency 

•  Applicants age must be over 18 years. 
•  At least one applicant must be Australian citizens or permanent residents. 

First-Time Buyer Status

•  Applicants must not have previously owned property in Australia. 

Principal Place of Residence 

•  The property must be intended as the principal place of residence. 

Income Limits 

•   For individuals: Annual gross income must be less than $125,000. 
•   For couples: Annual gross income must be less than $200,000 combined. 

 

Approved Lenders 

• The loan must be obtained from one of the 32 National Housing Finance and Investment Corporation-approved lenders. 

Minimum Deposit 

• Applicants are required to have a minimum deposit of 5%. 

Property Type & Purchase Limit 

• For Sydney and other regional centres, the property value must be less than $900,000. 
• For the rest of NSW, the property value must be less than $750,000. 

5. 5. First Home Super Saver Scheme

A program enabling first-home buyers to make voluntary contributions to their superannuation up to $15,000 annually, totalling $50,000 overall, towards their first home. 

Eligibility Criteria  

The eligibility criteria to qualify for FHSSS in NSW are as follows: 

Age & Residency 

• While individuals under 18 years old can make voluntary contributions to their     superannuation, they must be over 18 years old to make an FHSS request. 
• Applicants must not have previously owned property in Australia. 
• At least one applicant must be Australian citizens or permanent residents. 

Residency Requirement 

• Applicants must move into the home within 12 months of purchase (or as soon as practicable) and reside there continuously for at least 6 months. 

Upfront Costs 

• Applicants are also required to cover the upfront costs associated with purchasing the property. 

Key Takeaway 

Now that you’re aware of the various types of first home buyer schemes, here are some smart tips to keep in mind as you navigate your first home buying journey in NSW: 

• Before diving in, prioritise understand your budget thoroughly. Factor in not just the purchase price, but also additional expenses such as stamp duty (if applicable), ongoing mortgage repayments, rates, and maintenance.  
• Seeking advice form an expert real estate agent can be a lifesaving decision. They can help you in comparing loan options, negotiate rates, and guide you through the entire home loan process. 

Buy Your First Home with SREG  

At Sydney Real Estate Group, we understand the ins and outs of government grants like the First Home Buyer Scheme, NSW shared equity scheme, Family Home Guarantee Scheme etc. and how they can benefit you. We’ll work closely with you to understand your dream home vision, whether it’s a specific property type or a desired location in NSW. Partnering with trusted financial advisors, we’ll create a personalised strategy to help you achieve homeownership. Our experienced property advisors will listen closely to your needs and present you with a curated selection of properties that perfectly match your requirements. With SREG by your side, you’ll feel confident and informed every step of the way. 

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