Changes to the First Home Buyers Scheme

The First Home Buyers Scheme has expanded.  Starting from 1 July 2023, if you are buying a new or existing home with a value of up to $800,000, you will be fully exempt from paying transfer duty.  This means you do not have to pay any duty on the purchase of the property.  However, if the home is valued over $800,000, but less than $1,000,000, you may qualify for a concessional rate.   The concessional rate means that you will pay a reduced amount of transfer duty compared to the standard rate.  The exact amount of the concessional rate will depend on the value of the property. 

If you are purchasing vacant land to build a home, you may also be eligible for an exemption or a concessional rate of transfer duty.  If the land is valued up to $350,000, you will receive a full exemption.  This means you do not have to pay any transfer duty on the purchase of the vacant land.  If the land is valued over $350,000 but less than $450,000, you may qualify for a concessional rate.  Similar to buying a home, the concessional rate for vacant land means you will pay a reduced amount of transfer duty based on the value of the land. 

Eligibility
To be eligible for the First Home Buyers Assistance Scheme:

• the purchase must be for a new or existing home, or vacant land in NSW
• the property value must be within the threshold amounts
• the transfer must be for the whole property
• 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 previously received an exemption or concession under the scheme
• at least one of the first home buyers must be an Australian citizen or permanent resident
• for new or existing homes, you must meet the requirements for living in the property.

_{*This requirement may be waived upon application.  Contact Revenue NSW for more information.}

Requirements for living in the property
If you are buying a new or existing home, you must follow the requirements below:

For contracts exchanged on or after 1 July 2023
You or one of the other eligible first home buyers must:

• move into the home within 12 months after settlement, and
• live in the property as your principal place of residence for at least 12 continuous months.

For contracts exchanged between 1 July 2017 and 30 June 2023 (inclusive)
You or one of the other eligible first home buyers must:

• move into the home within 12 months after settlement, and
• live in the property as your principal place of residence for at least 6 continuous months.

If you are a member of the Australian Defence force
If you are a member of the permanent forces of the Australian Defence Force when you exchange contracts, you won’t have to meet these residence requirements if you and everyone you’re buying with is on the NSW electoral roll.

If you have any questions about the requirements for living in the property, contact Revenue NSW.

Changes in living arrangements
If your circumstances change and you will not be able meet the residence requirement you will no longer be eligible for the scheme.

You must let Revenue NSW know straight away to arrange for the correct duty to be paid. Otherwise, you will face the possibility of interest and penalties.

To find out how much you will pay go to the First Home Buyers Assistance calculator-for all purchases from 1 July 2017.

Once you have exchanged contracts, you can apply for the First Home Buyers Assistance Scheme by submitting the forms below, with your proof of identify documents, to your solicitor:

• For contracts exchanged on or before 30 June 2023 click here
• For contracts exchanged on or after 1 July 2023 click here
• You will also need to complete a Purchaser/Transferee Declaration form (individual)

For more information go to the First Home Buyers Assistance Scheme page First Home Buyers Assistance scheme | Revenue NSW or contact one of our experienced Property and Conveyancing Team on 8525 2700 or click here to request an appointment.

Article by Kate Allenby
Photo by Roselyn Tirado on Unsplash