Effective 1 July 2017, the New South Wales Government introduced a package of changes to benefit first home buyers under various schemes.
First Home Buyers Assistance Scheme – Stamp Duty Concessions
The First Home Buyers Assistance Scheme replaces the former First Home New Home scheme.
The new First Home Buyers Assistance scheme provides eligible buyers of both new and existing homes with exemptions and concessions to the stamp duty payable for the property. The new scheme increases the value cap so that:
- No stamp duty is payable for homes valued up to $650,000 (previously $550,000); and
- Concessions apply to stamp duty for homes valued between $650,000 and $800,000 (previously $550,000 – $650,000).
The cap remains unchanged for vacant residential land. Eligible buyers of vacant land are entitled to:
- A full exemption from stamp duty for land valued up to $350,000; or
- Concessions to the stamp duty for land valued between $350,000 and $450,000.
To be an ‘eligible purchaser’ under this scheme, purchasers (and/or their spouse- that is, husband, wife or de facto partner) cannot have owned residential property in Australia, and at least one of the eligible purchasers must occupy the home as their principal place of residence for at least 6 continuous months, commencing within 12 months of settlement. This remains unchanged from the previous scheme.
Buyers who received an exemption or concession under the previous First Home New Home Scheme are not eligible to apply for the new First Home Buyers Assistance Scheme.
First Home Owner Grant (New Homes) Scheme
Under the First Home Owner Grant scheme, a one-off grant is payable to eligible first home buyers building or purchasing a new home (a new home is a home which has never been sold before, or a home that has been substantially renovated).
For eligible transactions entered into on or after 1 July 2017, a one-off grant of $10,000 will be available to first home buyers for:
- The building of a new home (under a home building contract or built by an owner builder), where the total value of the constructed home and land does not exceed $750,000; or
- The purchase of a new home valued up to $600,000.
To be an ‘eligible purchaser,’ the same requirements apply as with the First Home Buyers Assistance scheme.
New Home Grant Scheme – Closed
The New Home Grant Scheme, which previously provided a one-off grant of $5,000 to owner-occupiers and investors towards the purchase of new homes, homes purchased off the plan, and vacant land has now been closed.
Shared Equity Scheme
From 1 July 2017, the shared equity scheme will apply where a home buyer purchases a home with an ‘approved equity partner’ (such as a registered Community Housing Provider, NSW Land and Housing Corporation and other ‘approved persons’).
The scheme operates in the following way:
- The home buyer acquires at least a 20% share in the ownership of the property;
- The equity partner is entitled to a share in any capital gain or loss when the property is sold, but has no right to occupation; and
- The home buyer may elect to purchase more equity in the property from the equity partner at a later date for an agreed price, without further stamp duty being incurred.
This scheme does not impact on the ability to apply for the First Home Buyers Assistance Scheme and/or the First Home Owner Grant, provided that the home owner/s (the occupiers of the home) meet the eligibility criteria, and the purchase price falls under the relevant value cap.
The NSW government is yet to issue guidelines as to what other parties may be an ‘approved person’ for the purpose of this scheme.
Off the Plan Stamp Duty Deferral
Buyers purchasing an off the plan property with the intention of occupying the home as their principal place of residence (regardless of whether they have owned residential property in Australia or not) remain entitled to a 12 month delay in the payment of stamp duty. This allows stamp duty to be deferred for up to 15 months following the exchange of Contracts.
Investors purchasing off-the-plan properties are no longer entitled to defer the payment of stamp duty, and must pay the duty within 3 months following the exchange of Contracts.
If you would like to discuss matters relating to the purchase of your home, please contact our office on (02) 8076 4539 to speak with one of our lawyers.
This publication is intended only to provide a summary of the subject matter covered. It does not purport to be comprehensive or to render legal advice. The publication reflects the law at the date the publication was written, which may differ at the date the publication is being read. No reader should act on the basis of any matter contained in this publication without first obtaining specific professional advice.
Liability limited by a scheme approved under Professional Standards Legislation