Know your entitlements as a first home buyer or home builder

The following is a summary of recent the current state of the various Federal Government Schemes and Grants which apply to first home buyers as well as the recent HomeBuilder Grant scheme.

First Home Buyer Assistance Scheme (FHBAS) – more information is available here.

The FHBAS is a NSW Scheme designed to relieve First Home Buyers from their Stamp Duty obligations.

Eligibility

• the contract date must be on or after 1 July 2017 and must be for the whole property – Note: To be eligible for the increased transfer (stamp) duty threshold available between 1 August 2020 and 31 July 2021, the contract date must be on or after 1 August 2020 and on or before 31 July 2021)
• you must be an individual, not a company or trust
• you must be over 18
• you, and your spouse or partner, must never have owned or co-owned residential property in Australia
• you, and your spouse or partner, must never have received an exemption or concession under this scheme
• at least one of the first home buyers must be an Australian citizen or permanent resident.

Requirements for living in the property

You or one of the other first home buyers must move into the home within 12 months after buying the property AND live there for at least six continuous months.

New Homes (1 August 2020 – 31 July 2021)

• Buy a new home valued at less than $800,000, apply for a full exemption, and pay no transfer duty.
• Buy a new home valued between $800,000 and $1 million, and apply for a concessional transfer duty rate. The amount will be based on the value of your home.

New Homes (1 July 2017 – 31 July 2020)

• Buy a new home valued at less than $650,000, apply for a full exemption, and pay no transfer duty.
• Buy a new home valued between $650,000 and $800,000, and apply for a concessional transfer duty rate. The amount will be based on the value of your home.

Vacant Land (1 August 2020 – 31 July 2021)

• You won’t pay transfer duty if your land is valued at less than $400,000.
• For land valued between $400,000 and $500,000, you’ll receive a concessional rate.

Vacant Land (1 July 2017 – 31 July 2020)

• You won’t pay transfer duty if your land is valued at less than $350,000.
• For land valued between   $350,000 and $450,000, you’ll receive a concessional rate.

Existing Homes

• Buy an existing home valued at less than $650,000, apply for a full exemption and pay no transfer duty.
• Buy an existing home valued between $650,000 and $800,000, and apply for a concessional transfer duty rate. The amount will be based on the value of your home.

A new home is a home that has not been previously occupied or sold as a place of residence and includes a substantially renovated home and a home built to replace demolished premises.

First Home Owner Grant (New Homes) (‘FHOG’) – more information is available here.

The FHOG is a NSW government grant which of $10,000 for First Home Buyers purchasing new homes worth no more than $600,000.

This $10,000 grant is available for:

• Contracts to buy a new home;
• Building contracts by the owner of the land; and
• Owners of the land building their own home.

Eligibility

• the contract date must be on or after 1 July 2017
• For a new home purchase – the purchase price must be no more than $600,000
• For a land purchase to build a new home – the total price of the land and the home must be no more than $750,000.

Requirements for living in the property.

• One of the first home buyers must move into the new home within 12 months after buying the property; and
• live there for at least six continuous months.

Note: If you’re buying land and building a new home, you must move in within 12 months after construction is complete.

Applications for the Grant are done through the purchaser’s bank or financial institution when arranging finance to purchase the property. The list of Approved lenders (agents) under the Grant can be found here.

First Home Loan Deposit Scheme (FHLDS) – more information is available here.

This Scheme is a Federal Government initiative designed to reduce the percentage of the purchase price of the property required as a deposit. Usually, a purchaser will require a 10% deposit to purchase a property.  Instead of having to source the cash for the deposit, the Scheme provides a guarantee to a participating lender of up to 15% of the value of the property purchased that is financed by an eligible first home buyer’s loan. Therefore, borrowers are also not required to pay lenders mortgage insurance.

Eligiblity

Eligibility depends on:

• geographic location of the property,
• the type of the property; and
• an income test.

Information about Scheme eligibility is available here.

Applications for the Scheme are made directly through one of the Scheme’s participating lenders.

HomeBuilder – more information is available here.

HomeBuilder is a Grant which provides eligible owner occupiers with $25,000 to build a new home, substantially renovate an existing home or buy an off the plan home/new home.

Eligibility

• The contract must be signed no later than 31 December 2020.
• Construction must also commence within three months of the contract date.
• Either:
  • A comprehensive home building contract to build a new home as your principal place of residence where the property value (house and land) does not exceed $750,000 (inclusive of GST); OR
  • A contract with a registered builder to substantially renovate your principal place of residence where the renovation contract is between $150,000 and $750,000 (inclusive of GST), and where the value of your existing house and land does not exceed $1.5 million; OR
  • a contract to purchase an off the plan home/new home as your principal place of residence where the contract price does not exceed $750,000 (inclusive of GST) and construction had not commenced prior to 4 June 2020.