Australia: First home benefits - what is available in NSW post 1 October 2012?

In brief - Some First Home Owner schemes in NSW have been replaced by new schemes

The First Home Owner Grant has been replaced by the First Home Owner Grant (New Home) Scheme. The First Home Plus Scheme has been replaced by the First Home - New Home Scheme. Stamp duty concessions are available under the NSW New Home Grant Scheme.

$7,000 First Home Owner Grant no longer available

The $7,000 First Home Owners Grant for established properties ceased to be available from 1 October 2012. This means that if you are a first home buyer who enters into a contract for sale on or after 1 October 2012, you are no longer entitled to this grant.

The $7,000 grant is still available to first home buyers who entered into a contract for sale for an established property prior to 1 October 2012.

First Home Owner Grant (New Home) Scheme

From 1 October 2012, the First Home Owner Grant (New Home) replaced the First Home Owners Grant. The new scheme applies to any contracts entered into by a first home buyer on or after 1 October 2012.

The eligibility requirements for the new scheme are the same as the old $7,000 scheme with the exception that:

  • The purchaser must either purchase a new home or build a new home
  • The grant amount is $15,000 up to 31 December 2013
  • The grant amount reduces to $10,000 on 1 January 2014
  • The cap on value of an eligible transaction has dropped from $835,000 to $650,000

First Home Plus Scheme has been replaced

First Home Plus was the scheme which provided stamp duty exemptions to first home buyers.

This scheme ceased on 31 December 2011 and was replaced with the First Home - New Home Scheme.

First Home - New Home Scheme

The First Home - New Home Scheme replaces the First Home Plus Scheme. The new scheme is applicable to contracts entered into on or after 1 January 2012.

From 1 January 2012 to 30 June 2012 the scheme provided stamp duty exemptions to first home buyers purchasing either a new home valued at up to $500,000 or vacant land valued at up to $300,000 on which the purchaser intents to build their home.

The scheme also provided stamp duty concessions on transfer duty on new homes valued between $500,00 and $600,000 and vacant land valued between $300,000 and $450,000.

From 1 July 2012 the scheme provides stamp duty concessions to first home buyers purchasing either a new home valued up to $550,000, or vacant land valued at up to $350,000 on which the purchaser intends to build their home.

The scheme also provides stamp duty concessions on transfer duty on new homes valued at between $550,00 and $650,000 and vacant land valued at between $350,000 and $450,000.

There are no longer any stamp duty concessions for first home buyers buying an established property unless the contract for sale was entered into prior to 1 January 2012.

Stamp duty concessions under the NSW New Home Grant Scheme

The NSW Home Builders Bonus (HBB) was introduced to stimulate the construction of new homes and was applicable to eligible transactions from 1 July 2010 to 1 July 2012. This scheme has now ceased.

The HBB scheme has been replaced by the NSW New Home Grant Scheme, which commenced on 1 July 2012. It is a $5,000 stamp duty concession available to any purchaser of a new property (both off the plan and newly built).

The only eligibility criteria for the New Home Grant Scheme are that the property being purchased is new, off the plan or vacant land on which a new home is to be built.

The applicant can be an individual, corporation or trustee of a trust and there are no residency requirements. The applicant can be an investor, new home buyer (not first home buyer) or a builder.

Eligible transactions are:

  • newly built home up to the value of $650,000
  • vacant land up to a value of $450,000 on which a new home will be built

The $5,000 is a rebate off the stamp duty payable in connection to the purchase. For example, if you buy a vacant block of land for $180,000 or less then no stamp duty is payable.

Builders are still able to claim the exemption from aggregation of multiple purchases. There is no limit to the number of times this concession can be claimed as long as it is an eligible transaction.

If you are a first home buyer and are eligible for a stamp duty exemption / concession under the First Home – New Home Scheme, you cannot receive the $5000 New Home Grant.

Application must be made directly with the Office of State Revenue (no in house stamping at this time) and the balance of the stamp duty owing must be paid at the time of application. The application must be made within three months of the date of the eligible contract for sale.

If you are purchasing an off-the-plan property you are unable to apply for the 12 month extension of the date that stamp duty is payable.

If the stamp duty payable on the transaction is less than $5,000, the balance of the grant will be paid to the purchaser upon completion of the contract.

Claire Day Brendan Maier
Property acquisition, development and sale
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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