First home buyer NSW: no stamp duty to $800,000, the $10,000 grant, and how they add up

What do first home buyers get in NSW?

New South Wales first home buyers can get up to three kinds of help: the state's First Home Buyers Assistance Scheme, which removes or cuts transfer duty, the state's First Home Owner (New Homes) Grant, and the federal 5% Deposit Scheme. They are separate, with separate rules, and a buyer can qualify for one without the others.

The duty exemption cuts a tax you'd otherwise pay on settlement. The grant is cash toward a new home. The 5% Deposit Scheme doesn't give you money at all: it lets you buy with a smaller deposit without paying lenders mortgage insurance (LMI), the insurance a lender charges you for when you borrow more than 80% of the price.

What this means for you: in NSW the duty exemption is where most of the money is, because it covers established homes too. The grant is real, but it only reaches buyers of new homes at the lower end of the market.

How much is the first home owner grant in NSW?

The NSW First Home Owner (New Homes) Grant is $10,000, for a first home buyer who buys or builds a new home [1]. The purchase price can't be more than $600,000, or, if you're buying land and building, the land and the building contract together can't be more than $750,000 [1].

It's run by Revenue NSW, the state agency that also runs transfer duty. It's a grant, not a loan, and it comes with conditions on living in the home, set out below.

Can you get the NSW grant on an established home?

No. The NSW grant is only for a new home: one newly built, bought off the plan, or substantially renovated, that no one has lived in since the work was finished [1]. Revenue NSW says it plainly: the grant is not available for established homes [1].

The First Home Buyers Assistance Scheme is different. It covers new and existing homes alike, so a buyer of an established house or unit at $800,000 or less still pays no transfer duty [2].

What this means for you: if you're choosing between new and established, the grant is only $10,000 of the difference, and only under $600,000. The duty exemption, which doesn't care whether the home is new, usually matters more.

What counts toward the $600,000 and $750,000 grant limits?

There are two limits, and which one applies depends on how you buy. If you buy a home that's already built, or off the plan, the purchase price must not be more than $600,000 [1]. If you buy land and sign a contract to build, the land, the building contract and any variations together must not be more than $750,000 [1].

This is where builds go wrong. A house-and-land package priced just under $750,000 can creep over it with a few upgrades signed after the contract, and the grant is lost. Before you sign variations, add them to the land and build price and check where you land.

Do first home buyers pay stamp duty in NSW?

Not on a home valued at $800,000 or less. NSW calls stamp duty transfer duty, and the First Home Buyers Assistance Scheme removes it in full up to that value, on a new or established home [2]. Above $800,000 and below $1 million you pay reduced duty, and from $1 million you pay normal duty [2][4].

The exemption isn't a grant. It's applied when your duty is assessed, through your solicitor or conveyancer, so it lowers a bill rather than putting money in your account [2].

How much is stamp duty in NSW?

Normal transfer duty in NSW is worked out in bands. For a home between $387,000 and $1,290,000, it's $11,602 plus $4.50 for every $100 over $387,000. Above $1,290,000, it's $52,237 plus $5.50 for every $100 over that [4].

Here's what that comes to at common prices, and what an eligible first home buyer pays instead [2][4][10]. Use the stamp duty calculator for any other price.

What this means for you: on an $800,000 home the exemption saves $30,187, about three times the grant [10]. That's cash you don't need on settlement day, which is often what decides whether a buyer can go ahead.

What happens between $800,000 and $1 million?

Between $800,000 and $1 million, a NSW first home buyer pays reduced duty: more than nil, less than the normal amount [2]. At $1 million the help is gone, and normal duty of $39,187 applies [2][4][10].

Revenue NSW publishes the two lines but not the sliding scale between them on the pages we read, so we don't print an in-between figure we can't trace. Revenue NSW's own First Home Buyers Assistance calculator gives the exact amount, and your conveyancer or solicitor confirms it on your contract.

What this means for you: a buyer at $850,000 is still getting help, but not the full exemption, and the exact amount isn't on the pages we read. If your budget sits in this band, get the figure before you set your price, because it's cash you need on settlement day, and a price at or under $800,000 brings the whole exemption back.

Buying land to build on in NSW

Vacant land has its own thresholds. There's no transfer duty on land valued at $350,000 or less, a saving of $10,307 at that price. Duty is reduced above $350,000 and below $450,000, and from $450,000 you pay normal duty, which is $14,437 at that price [2][4][10].

The home you then build can get the $10,000 grant, if the land and the building contract together come to $750,000 or less [1]. So a land-and-build buyer can face two tests on two different numbers: the land value for duty, and land plus build for the grant.

Who counts as a first home buyer? Four different tests

There isn't one definition of a first home buyer in NSW. The grant, the duty exemption, the 5% Deposit Scheme and the First Home Super Saver Scheme each ask a different question about what you've owned before.

What this means for you: passing one test tells you nothing about the others. A buyer who owned an investment unit years ago and never lived in it can still fail the duty exemption's test, because it counts any residential land, and fail the 5% Deposit Scheme's test if it was in the last 10 years. Each of these tests is written about property in Australia; if you've owned a home overseas, we check the exact wording of each one with you before you rely on it.

What happened to First Home Buyer Choice?

First Home Buyer Choice has closed. It let buyers pay a yearly property tax instead of stamp duty, and it ended when the First Home Buyers Assistance Scheme was expanded [5].

Anyone who opted in before it closed keeps paying the property tax and can't change their mind [5]. If you're buying now, the exemption to $800,000 is the scheme that applies, and older pages that still describe the choice are answering a question no buyer can act on.

Can first home buyers in NSW avoid LMI?

Yes, through the federal 5% Deposit Scheme. It lets a NSW first home buyer buy with a 5% deposit and no lenders mortgage insurance, because Housing Australia, a government agency, guarantees the lender in place of the insurance [6]. Single parents and legal guardians applying on their own can buy from a 2% deposit [6].

The scheme has no income cap and no waiting list [6]. It has a ceiling as well as a floor: if you have 20% or more saved after purchase costs such as stamp duty and legal fees, you can't use it [6].

Here's what LMI would cost on a 95% loan for a first home buyer, from one insurer's published rate card [9][10]. Under the scheme, that cost isn't charged. These are illustrations from one card, not quotes; your premium depends on the insurer, the loan and the lender.

Some lenders also waive LMI for certain professions. See LMI waivers and the 5% Deposit Scheme.

What are the 5% Deposit Scheme price caps in Sydney and regional NSW?

For the 5% Deposit Scheme, the NSW cap is $1,500,000 in Sydney and six named regional areas, and $800,000 everywhere else in the state [6]. Both the price you pay and the lender's valuation have to be at or under the cap [6].

The six regional areas are the Central Coast, Coffs Harbour-Grafton, Illawarra, the Mid North Coast, Richmond-Tweed, and Newcastle and Lake Macquarie [6]. The list is short: a buyer anywhere else in regional NSW is on the $800,000 cap.

What this means for you: outside Sydney and those six areas, the $800,000 caps line up, and a first home at that price can get the full duty exemption and the 5% Deposit Scheme together. In Sydney, the scheme's cap reaches well past the point where the duty help stops.

Buying above $1 million in Sydney

A first home buyer in Sydney can use the 5% Deposit Scheme up to $1,500,000, but the duty help stops at $1 million [2][6]. On a $1,200,000 home, that means a 5% deposit of $60,000 and no LMI, but normal transfer duty of $48,187 on top [4][10].

The scheme still does a lot at that price: on one insurer's card, the LMI it saves on a 95% loan of $1,140,000 is about $56,544 [9][10]. But the cash you need on the day is the deposit plus the duty, about $108,187 before legal costs [10].

What this means for you: above $1 million, the duty is close to the size of the deposit itself, so the real question is how much cash you have, not how much deposit. Plan the two together.

Help to Buy and the First Home Super Saver in NSW

Two more federal schemes are open to NSW buyers. Help to Buy is shared equity: the government contributes up to 30% of the price of an existing home, or up to 40% of a new one, and you buy with a deposit from 2% [7]. You own the home and share some of its value with the government. There are 10,000 places a year, and the current income limits are $103,000 for a single and $165,000 for a couple or single parent [7]. All applicants must be Australian citizens [7].

The First Home Super Saver Scheme lets you save for a deposit inside your super. You can put in up to $15,000 a year, and up to $50,000 in total, in voluntary contributions, then ask the Australian Taxation Office to release them, with deemed earnings, toward your first home [8]. See Help to Buy and First Home Super Saver.

Can you get the grant, the exemption and a federal scheme together?

Mostly, yes. The 5% Deposit Scheme's guide says using it doesn't stop you getting state or territory help [6]. Help to Buy's own page says stamp duty concessions and grants still apply [7].

Neither Revenue NSW page we read says the grant and the duty exemption rule each other out, so on a new home up to $600,000 you may be able to get both; your conveyancer can confirm it for your contract [1][2].

The one firm exclusion: the 5% Deposit Scheme and Help to Buy can't be used together [6]. Help to Buy also rules out state shared equity schemes, loans and guarantees [7].

What is the whole package worth on a NSW home?

An illustration, not a client file. A first home buyer pays $800,000 for an established unit in Sydney. There's no grant, because it isn't new. There's no transfer duty, a saving of $30,187. Through the 5% Deposit Scheme, a $40,000 deposit is enough, with no LMI; on one insurer's card, that insurance would otherwise be about $34,276 on a 95% loan. That's about $64,463 of help, without a grant [2][4][6][9][10].

Buy a newly built home in Newcastle for $600,000 instead, and all three may apply: the $10,000 grant, $21,187 of duty saved, and the 5% Deposit Scheme on a $30,000 deposit, where the same insurance would be about $19,152. About $50,339 in all [1][2][4][6][9][10].

Revenue NSW explains the state help and the federal sites explain the federal help, so the total on your own price is worth adding up before you sign. See how the schemes fit together and first home buyer grants by state.

Can the NSW grant go towards your deposit?

Usually not at the time you need it. Lodged through your lender, the grant is paid at settlement, or at the first progress payment on a build, so it can't pay the deposit you hand over when you exchange contracts [1].

Plan your deposit from your own savings, and treat the grant as money that arrives later. For the 5% Deposit Scheme, the 20% ceiling is counted after purchase costs [6]: on an $800,000 home, $160,000 or more left after purchase costs puts you outside it [10].

How long do you have to live in the home?

Each scheme sets its own rule, and the strictest one you use is the one that counts.

What this means for you: if you use the 5% Deposit Scheme, plan to move in within 6 months of settlement, not the 12 months the state allows, and don't plan to rent it out later while the guarantee is in place [6].

What happens after you buy with the 5% Deposit Scheme?

The guarantee ends on its own when your loan reaches 80% of the property's value, counted on your scheduled repayments; extra repayments you can redraw don't count toward getting there [6].

While it's in place, the loan can't be increased, so there's no topping up for renovations, though rate changes and product switches with the same lender are fine [6]. You can refinance to another lender on the scheme's panel and keep the guarantee, but not to a lender outside it [6].

The home buyer declaration you sign is a Commonwealth statutory declaration, and Housing Australia checks it against council and title records [6]. Answer it carefully.

Buying with a partner, a friend or family

For the grant, the ownership test covers your spouse, partner or co-buyer [1]. For the duty exemption, your spouse's past ownership counts even if they aren't on this contract [3]. So a partner who owned a home before can affect you both.

The 5% Deposit Scheme takes exactly two people on a joint application, and they don't have to be a couple: partners, friends or family members. Both must pass every test, and three or more buyers can't use it [6]. The First Home Super Saver works person by person, so a couple can each use their own savings for the same home [8].

A parent can help in another way, by putting up part of their home's equity as security. See guarantor home loans and the 5% Deposit Scheme against a guarantor.

Do you need to be a citizen to get first home buyer help in NSW?

It depends on the scheme. Help to Buy needs every applicant to be a citizen, the grant and the 5% Deposit Scheme accept permanent residents, and the First Home Super Saver's eligibility list has no citizenship test [1][6][7][8].

If you're on a visa, the grant may still be open if you buy with a citizen or permanent resident, because only one applicant needs to be [1]. See home loans for visa holders.

Building a new home or buying off the plan in NSW

A new build is where the grant lives, and where the rules are tightest. Off the plan counts as new for the grant [1]. For a build, the land, the building contract and every variation count toward the $750,000 limit [1].

Under the 5% Deposit Scheme, the building contract must be signed within 6 months of the loan settling, building must start within 12 months and finish within 36 months, and you move in within 6 months of the occupancy certificate [6]. Owner-builder contracts don't qualify; the builder must be licensed, insured and on a fixed-price contract [6]. Land price plus build cost must stay under the scheme's cap [6].

Two traps: the land has to be titled before the guarantee can be issued, inside the 90-day pre-approval window, and if you already own the vacant land, you can't use the scheme to build on it [6]. See construction loans.

How much can a first home buyer borrow in NSW?

What you can borrow comes from your income, your debts and your living costs, and each lender works it out its own way. The grant and the duty exemption don't change what a lender works out you can repay; they change how much cash you need on the day.

That's why the order matters: work out what lenders will lend you first, then fit the schemes to the price. See how much can I borrow.

What does a broker cost you?

How a broker is paid, and the rule Money Brain holds against it, is set out in full on its own page: what a mortgage broker costs.

Your first move

You've read the rules. Now there's one question left: on the home you want, at the price you'll pay, which of the duty exemption, the grant and the federal schemes do you actually get, and in what order do you do it?

That depends on new or established, where in NSW you're buying, what you and your partner have owned and what you've saved, and it's what Money Brain works out before anything goes to a lender.