Purchasing your first home in 2024 is big milestone. It entails a significant financial commitment and can be made considerably confusing by the abundance of jargon and various government incentive schemes. This article aims to dissect the concessions, incentives, and grants that are accessible to first home buyers in Syndey and New South Wales.
The Home Guarantee Scheme:
The Home Guarantee Scheme (HGS) is an Australian Government initiative to support eligible home buyers to buy a home sooner. The Scheme is administered by the Housing Australia on behalf of the Australian Government.
The Scheme includes three types of Guarantees:
Housing Australia provides a Guarantee to the Participating Lender of up to 15% of the value of a home loan under the First Home Guarantee or the Regional First Home Buyer Guarantee; and up to 18% under the Family Home Guarantee. This enables the home buyer to buy a home without paying Lenders Mortgage Insurance. The Guarantee is not a cash payment or a deposit for a home loan. Contact us to know if
you are eligible.
First Home Buyers Assistance Scheme – NSW
It is also known as a stamp duty exemption scheme or stamp duty concession scheme. It is offered by the NSW government.
If you are a first home buyer in NSW, you may be eligible for a full exemption or a reduced rate of stamp duty under the First Home Buyers Assistance Scheme.
From 1 July 2023, a full exemption from transfer duty will be available if you are buying a new or existing home valued up to $800,000, while homes valued over $800,000 and less than $1,000,000 may qualify for a concessional rate.
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.
First Home Owners Grant – NSW
The First Home Owner Grant (FHOG) in NSW is valued at $10,000, but certain conditions must be met. To qualify, the total value of your first home must not exceed $600,000, and it must be either newly constructed or 'substantially renovated'. A home is considered substantially renovated if most or all of the original house has been removed or replaced, and it is the first time the property has been sold and lived in after the renovations were completed.
If you are planning to build a new home from the ground up, you can still be eligible
for the first home buyer grant in NSW as long as the combined value of your land and
the home you build is less than $750,000.
First Home Buyers Super Saver Scheme
The First Home Super Saver Scheme enables you to increase your savings within your superannuation, allowing for quicker savings growth compared to saving outside of super due to the favorable tax treatment within your super fund.
You have the option to make additional contributions either before (concessional) or after-tax (non-concessional) into your super fund and withdraw up to the limit of $15,000 in a single year and up to $50,000 over multiple years. This limit applies individually, so couples can collectively save up to $100,000.
We highly recommend consulting with an accountant before participating in the First Home Super Saver Scheme. It is a complex area with numerous rules and regulations that must be followed.
Feel free to reach out if you would like to speak with an accountant. We have experts who can assist you in understanding the ins and outs of what is permissible under the FHSSS.
