What grant and schemes are available for first home buyers on purchases in NSW?

Purchasing a property for the first time can often feel like a daunting experience, with numerous steps and considerations involved. Fortunately, first home buyers of property in New South Wales (NSW) are offered with a grant and assistance scheme designed to ease the financial burden and provide much-needed support to those making this significant step into property ownership. These grants are specifically designed to help first-time buyers navigate the process with greater confidence, offering financial aid that can make a large difference when securing your first home. Below are some of the key grants and schemes available in NSW that can provide considerable support when beginning your home-buying journey.

First Home Owner (New Homes) Grant

The New South Wales Government department that manages the First Home Owner (New Homes) Grant is Revenue NSW. Revenue NSW offers a grant of $10,000 to eligible first home buyers to assist with the purchase or construction of their first home. This grant is specifically available for newly built properties, including houses, townhouses, apartments, or units. Whether you’re buying a property that’s newly constructed, purchasing off the plan, or acquiring a home that has been substantially renovated, you may be eligible for this support. Additionally, the grant also aids the purchase of vacant land, provided that your intention is to build a brand-new home on the block of land.

Pricing Limits

To qualify for the $10,000 first home buyer grant, there are specific pricing limits that must be met. The details are as follows:

• Newly Built Homes: If you’re purchasing a newly built house, townhouse, or home unit, the total purchase price must not exceed $600,000.
• Vacant Land and Building Contracts: In cases where you’re purchasing vacant land with the intention of building a new home, the combined value of the land and the home construction contract (including any building variations) must not exceed $750,000.
• Substantially Renovated Homes: If you’re buying a home that has been substantially renovated, the purchase price cannot exceed $600,000. For a home to be considered “substantially renovated,” it must meet the criteria: a significant part of the original structure must have been removed or replaced, and the property must not have been occupied by the seller, builder, or tenant before or after the renovation. Additionally, the home must be sold for the first time since the completion of these renovations.

These pricing limits are in place to ensure that the grant is used to support the purchase of quality, affordable homes that are either newly built or have undergone major improvements.

General Eligibility Criteria

To qualify for the additional $10,000 first home buyer grant, a buyer must meet the following eligibility criteria:

• Age Requirement: Each applicant must be at least 18 years old.
• Individual Purchaser: The purchaser must be made by an individual, not through a company or trust.
• Previous Homeownership: Neither you nor your spouse should have previously owned a home before 1 July 2000. Spouse includes de facto partners.
• Residency Requirement: For contracts signed on or after 1 July 2023, the home must be occupied as your principal place of residence within 12 months of the completion of the new build or the purchase of the property and must be lived in for a continuous period of at least 12 months.

Legal One Services provides expert property lawyers in Sydney to assist you with property acquisitions and sales, ensuring a smooth process every step of the way.

How To Apply

You are able to apply for the first home buyer grant through your mortgage broker or the bank providing your finance. If you prefer to apply directly with Revenue NSW, please be aware that applications must be lodged within 12 months of the settlement date or the completion of construction for a new home. After this 12-month period, the application process may become more complicated, as Revenue NSW may require additional documentation or carry out further verification to ensure eligibility is met.

Alternatively, our team at Legal One is here to assist you with the application process for the first home grant for new builds. Feel free to contact our office at (02) 9194 6365 for more information on how we can support you in securing this grant and navigating the application process.

First Home Buyers Assistance Scheme

The NSW Government also offers the First Home Buyers Assistance Scheme, which provides additional support for those purchasing a new or an existing home in the state. Starting from July 2023, the scheme offers a stamp duty exemption for first-time home buyers who purchase a property valued up to $800,000.

If the purchase price of your first home exceeds $800,000 but is still under $1,000,000, you may be eligible for a concessional stamp duty rate. This means you could receive a discount on stamp duty, with the amount of the discount depending on the property’s value. For example, a property purchased for $950,000 will receive a smaller discount compared to one purchased for $820,000.

The stamp duty rules for vacant land differ slightly. If you’re purchasing land on which you intend to build a home, you can receive a stamp duty exemption for land valued up to $350,000. For land valued between $350,000 and $450,000, a concessional stamp duty rate may apply, providing a discount rate depending on the exact value of the land.

These benefits make it more affordable for first home buyers to get onto the property ladder, with significant savings on both home and land purchases.

Eligibility

To be eligible for the first home buyer scheme, you must strictly meet the following requirements:

• The home you are purchasing must be a new or existing home or vacant land in NSW.
• The property value must meet the threshold amounts.
• It must be a whole property.
• You must purchase the property as an individual and not as a company or trust
• Must be over the age of 18
• You or your partner must have never owned a residential property in Australia or previously have received an exemption under the scheme.
• At least one of the first home buyers must be an Australian Citizen or permanent resident.

If you would like further clarity regarding the above criteria or if you would like to know if you are eligible to receive this benefit, please contact our property team to discuss further.

Living Requirements

For contracts exchanged on or after 1 July 2023, first home buyers are required to move into the property within 12 months of settlement and reside in the home as their principal place of residence for a minimum of 12 consecutive months.

Consequences of False Claims

Section 44 of the First Home Owner Grant and Shared Equity Act 2000 states that individuals must not provide false or misleading information when applying for a First Home Owner Grant or when participating in any related schemes.

Revenue NSW continuously monitors and investigates applications, cross-referencing data from various government agencies, including the Australian Taxation Office, to detect discrepancies between what is reported and actual circumstances.

If any breach of eligibility requirements is identified, serious consequences apply. You may be required to pay the full amount of stamp duty, in the circumstance where you were granted a stamp duty concession, you will be required to pay the balance of the amount. Additionally, you will be liable for any penalty and interest accrued from the due date of the stamp duty, which is the earlier of the settlement date or 90 days after the contract exchange. This interest can accumulate significantly depending on how long payment has been overdue.

Further penalties are outlined under the First Home Owner Grant and Shared Equity Act 2000, which also grants authorities the power to recover any amounts owed. Compliance with the eligibility criteria is crucial to avoid these substantial financial and legal repercussions.

Conclusion

The First Home Owner (New Homes) Grant and the First Home Buyers Assistance Scheme offer a range of financial support to first-time homebuyers, helping them achieve their dream of homeownership. These initiatives provide valuable assistance in reducing the financial burden associated with purchasing a first home, making homeownership more accessible for many.

However, it is essential that applicants carefully adhere to all eligibility criteria and comply with the relevant requirements to avoid penalties and ensure they receive the full benefits of the schemes. Meeting these criteria not only safeguards your entitlements but also ensures a smooth and successful application process. By fully understanding and meeting the requirements, you can take advantage of these beneficial programs and make the most of the opportunities available to first home buyers.

Legal One Services offers experienced property lawyers in Fairfield, Blacktown, Parramatta, and Revesby who can guide you through property acquisitions and disposals.

Please note the information in this blog is current up until 18 November 2024.  This blog should not be taken as legal advice and encourages all purchasers to ensure that they obtain legal advice on whether they meet the eligibility criteria of any grant or scheme, prior to entering into any Contract.

Written by Erica Abraham and Brendan Sedrak