First home buyer in NSW: stamp duty exemptions, grants and schemes

Buying your first home in NSW? You may be eligible for significant stamp duty savings, a cash grant, or a government-backed low-deposit scheme. This guide explains what is available, who qualifies, and how to claim it.

First Home Buyers Assistance Scheme (FHBAS): no stamp duty on many properties

The First Home Buyers Assistance Scheme (FHBAS), administered by Revenue NSW, can eliminate or reduce the transfer duty (stamp duty) you pay on your first home purchase.

Current thresholds (from 1 July 2023)

For purchases of new and existing homes:

• Full exemption: purchase price or value at or below $800,000. No transfer duty is payable.
• Concessional (reduced) rate: purchase price or value above $800,000 and below $1,000,000. Transfer duty is calculated at a reduced rate.
• No concession: purchase price or value at $1,000,000 or above. Full transfer duty applies at standard rates.

For purchases of vacant land:

• Full exemption: land value at or below $350,000.
• Concessional rate: land value above $350,000 and below $450,000.

Eligibility requirements for FHBAS

All of the following must be true:

• You (and any co-purchaser) have never previously owned residential property anywhere in Australia.
• You have never previously received an exemption or concession under the First Home Buyers Assistance Scheme.
• You are at least 18 years old.
• You are an Australian citizen or permanent resident (at least one buyer must be).
• The property will be your principal place of residence: you must move in within 12 months of settlement and live there for at least 12 continuous months.

If you are purchasing with a co-buyer who is not a first home buyer, the exemption or concession is reduced proportionally (based on the first home buyer's share of ownership).

Companies and trusts are generally not eligible, with limited exceptions for trustees purchasing on behalf of a beneficiary who meets the individual eligibility criteria.

What FHBAS covers

FHBAS applies to both new and existing residential properties, including apartments, houses, and townhouses. It also applies to vacant land, at lower thresholds. It does not apply to commercial property.

First Home Owner Grant (FHOG)

The First Home Owner Grant (FHOG) is a one-off payment from Revenue NSW for eligible first home buyers who purchase or build a new home. It is separate from the FHBAS stamp duty exemption and has different eligibility criteria and property value caps.

Key points about the FHOG in NSW:

• What it is: a cash grant paid by Revenue NSW to eligible first home buyers.
• New homes only: the FHOG applies to newly built homes (not established/existing homes). This includes new house-and-land packages, off-the-plan apartments, and substantially renovated homes where no one has previously lived in the renovated dwelling.
• Property value cap: the home must be valued at less than the applicable cap set by Revenue NSW. Check the current cap at revenue.nsw.gov.au.
• Residence requirement: you must live in the property as your principal place of residence for at least 12 continuous months, starting within 12 months of completion or settlement.
• Eligibility criteria: similar to FHBAS (never previously owned residential property in Australia, Australian citizen or permanent resident, 18 or over).

The FHOG and the FHBAS stamp duty exemption can be claimed together for an eligible new home purchase.

For current grant amounts and eligibility conditions, see the Revenue NSW FHOG page at revenue.nsw.gov.au. Grant amounts have changed over time; the current amount is published directly by Revenue NSW and is the authoritative source.

First Home Guarantee (5% deposit scheme)

The First Home Guarantee is a federal government scheme administered through Housing Australia (formerly the National Housing Finance and Investment Corporation). It allows eligible first home buyers to purchase a home with a deposit as low as 5%, without paying lenders mortgage insurance (LMI).

Under the scheme, the government provides a guarantee for up to 15% of the loan (making up the difference to reach 20%). This means the lender treats the loan as if you have a 20% deposit, avoiding the LMI cost that typically applies to loans with less than 20% deposit.

Key points about the First Home Guarantee

• Administered by: Housing Australia via participating lenders. Applications are made through a participating lender, not directly to the government.
• Property price cap: the property must be below the cap for the area. Caps differ by state and by metropolitan vs regional locations. Check current caps at housingaustralia.gov.au.
• Income cap: individual applicants must have a taxable income at or below $125,000 per year; joint applicants must have combined income at or below $200,000. Check current thresholds at Housing Australia.
• Eligibility: Australian citizen or permanent resident, first home buyer (never previously owned residential property in Australia), intending to owner-occupy.
• Places are limited: a set number of places are made available each financial year. Places are allocated through participating lenders on a first-come, first-served basis.

This scheme does not affect transfer duty. You can still claim the FHBAS exemption if you qualify and the property is within the eligible price range.

For current information, places remaining, and participating lenders, see housingaustralia.gov.au.

Can you combine these schemes?

The three schemes have overlapping but not identical eligibility criteria. For an eligible new home purchase:

• FHBAS + FHOG: can be claimed together for a new home within the applicable price thresholds. The FHBAS reduces or eliminates stamp duty; the FHOG is an additional cash payment.
• FHBAS + First Home Guarantee: can be claimed together. Stamp duty exemption (FHBAS) is administered by Revenue NSW; the deposit guarantee (First Home Guarantee) is arranged through your lender.
• FHOG + First Home Guarantee: can be claimed together for a new home.
• All three: possible for a new home purchase that meets all eligibility conditions for each scheme simultaneously.

For an established (existing) home: you can claim the FHBAS stamp duty exemption (if within threshold) and the First Home Guarantee (if within its property cap), but NOT the FHOG (which is for new homes only).

How to claim: the conveyancing process for first home buyers

For the FHBAS stamp duty exemption, your conveyancer or solicitor lodges an exemption application with Revenue NSW as part of the settlement process. You do not need to apply separately in most cases; your legal representative handles it. You will need to sign a declaration confirming you meet the eligibility criteria.

For the FHOG, the application is submitted through Revenue NSW (via your lender for construction loans, or directly for purchase of a completed new home). The timing of the payment depends on the type of transaction.

For the First Home Guarantee, your lender arranges the guarantee through Housing Australia as part of the loan application process.

Common mistakes to avoid

• Assuming you qualify without checking the current thresholds. Thresholds are updated periodically. Always check the Revenue NSW website for the current figures before relying on them.
• Forgetting to factor in transfer duty if you are above the exemption threshold. First home buyers purchasing above $800,000 will still pay some transfer duty. Budget for it.
• Not checking the residence requirements before purchasing an investment property. Both FHBAS and FHOG require the property to be your principal place of residence. Using the property as an investment (even temporarily) can result in the exemption being clawed back.
• Overlooking the FHOG property cap for new builds. If you are building a new home or purchasing off-the-plan, confirm the total value is within the current FHOG cap.
• Purchasing with a co-buyer who is not a first home buyer without understanding the impact. If your co-buyer has previously owned property, the FHBAS concession is proportionally reduced or may not apply at all, depending on the ownership split.

Conveyancing Explained provides general information about property transactions in New South Wales. It is not legal advice and does not create a client relationship. For advice on your situation, engage a licensed NSW conveyancer or a solicitor.