Although most people are generally aware of the first home buyer’s grant and duty concessions/exemption for properties purchased in NSW (including houses and vacant land in which a first home will be built), it seems that many are unsure as to the finer detail surrounding these benefits.
Here we attempt to answer some of the more important questions surrounding the first home buyer’s benefits. Should you have any further questions however, please contact us and we will be more than happy to assist you with your query.
How much is the grant and is there a cap on the purchase price?
The NSW First Home Buyer’s grant is currently $7,000.00 for eligible purchasers. Although there is no income or asset test to qualify for the benefits, the purchase price of the property is relevant (“cap”).
On 1 January 2011 the relevant cap was amended from $750,000.00 to an increased cap of $835,000.00. This is quite a significant increase benefiting those first home buyers considering properties in the upper level price range.
Please note however that the previous cap of $750,000.00 still applies where the contract is dated between 1 January 2011 and 31 December 2010. Contracts dated prior to 31 December 2010 are not subject to a cap.
Unfortunately a “sliding scale” does not apply, and a purchase price greater than $835,000.00 will disentitle an applicant to obtaining the grant or the duty exemption.
Is there eligibility requirements for the First Home Buyer’s grant?
In order to obtain the FHB grant, in addition to the cap amounts discussed above, an applicant must satisfy the following criteria:
- The applicant must be a natural person and not a company or trust;
- The applicant must be a permanent resident or Australian citizen;
- The applicant must be 18 years of age;
- The applicant (and/or their spouse including de facto spouse) must not have owned a residential property (including jointly, separately or with some other person), in Australia before July 2000;
- The applicant (and/or their spouse including de facto spouse) must not previously have owned a residential property (including jointly, separately or with some other person), in Australia and occupied that property for more than six months continuously;
- The applicant must enter into a contract for the purchase of a home or signed a contract to build a home on or after 1 July 2000 (or in the case of an owner-builder, laying of the foundations commenced on or after 1 July 2000);
- The application (or their spouse including de facto spouse) must not have receive a grant under the First Home Owner Grant Act 2000 in any State or Territory (unless subsequently repaid) previously; and
- The property must be occupied as the applicant’s principal place of residence for a continuous period of six months, commencing within 12 months of settlement or construction of the home.
Will I have to pay stamp duty as a First Home Buyer?
The First Home Buyers benefit provides First Home Buyers with various duty incentives, depending on the purchase price, and include:
Duty incentive for houses:
- Exemptions on stamp duty up to a purchase price of $500,000.00; and
- Concessions on stamp duty on homes priced between $500,000.00 and $600,000.00
There is no discount of duty for a house with a purchase price greater than $600,000.00
Duty incentives for vacant residential land on which a first home will be built:
- Exemptions on stamp duty up to a purchase price of $300,000.00; and
- Concessions on stamp duty on land priced between $300,000.00 and $450,000.00
There is no discount of duty for vacant land with a purchase price greater than $450,000.00
Are there eligibility requirements for the duty concession/exemption?
In order to obtain a stamp duty exemption/concession on your first home purchase, you must meet the eligibility requirements below:
- The whole property must be being purchased;
- Residency requirements the same as above (that is, the property must be occupied as the applicant’s principal place of residence for a continuous period of six months, commencing within 12 months of settlement or construction);
- The applicable must be an ‘eligible purchasers’, meaning that the applicant is a natural person at least 18 years of age and they have not (and their spouse/de facto spouse) has not:
It is worth mention that in the event that there are more than one purchaser, an eligible purchaser may still be eligible for a duty concession under the First Home Plus One (see below), even if the other Purchasers are not considered eligible purchasers.
What is the First Home Plus One?
The First Home Plus One benefit provides a duty concession to an eligible purchasers who purchase property with other purchasers who are not eligible First Home Buyers..
To qualify, the eligible purchasers must purchase at least 50% cent of the property. The value limits and other eligibility criteria of First Home Plus apply, and the stamp duty will be calculated based on the share of the property obtained.
Please note that if the first home buyer’s spouse has ever claimed a benefit under the First Home duty concession/exemption, they will not be entitled to claim under the First Home Plus One benefit.