Housing affordability is made easier with these grants and concessions.
A few years ago, the NSW Government announced a suite of changes to their first homeowner’s package. It was designed to improve housing affordability across the state for first home buyers, who often face stiff competition from investors. If you’re about to enter the property market for the first time in NSW, see what concessions you could be eligible for.
What did the changes to the package include?
There were three key areas of support announced as part of the package including:
- Financial support: Increase in grants and concessions
- Housing supply: Increase supply but at reasonable prices
- Infrastructure: More infrastructure to support growth and demand
These changes and updates to financial support are the most impactful to a first home buyer, which we'll explore below.
How the changes to first home owners’ financial support can benefit you
There are a number of concessions you could be eligible for in the package. Here’s the nitty-gritty on what you need to know:
Stamp Duty relief
Given the high prices of housing in Australia, the extra cost of Stamp Duty for first home owners was a serious obstacle for first home buyers:
Stamp Duty has now been abolished on all homes up to $650,000. You could save $24,740 on a $650,000 home with this policy
First home buyers can also receive Stamp Duty relief for homes up to $800,000
First Home Owners Grant
The First Home Owners Grant (FHOG) has been around for a while, but has undergone some changes to widen the scope of what can be purchased with this grant:
People building new homes receive a $10,000 grant for new builds up to $750,000
People buying new homes also receive $10,000 for homes up to $600,000 in value
Lenders Mortgage Insurance changes
Lender Mortgage Insurance (LMI) was another added cost for many first home buyers, costing them an extra 9% of the premium:
Insurance duty on LMI has now been abolished
Foreign investors to pay higher tax
A spike in foreign investment impacted rising house prices in Australia. Foreign investors must now pay higher duties and land taxes including:
Foreign investors will pay double on Stamp Duty from 4% to 8%
Foreign investors land tax will increase from 0.75% to 2%
Investors required to pay stamp duty
Many first home owners face strong competition from investors:
Regardless of the type, investors will no longer be able to delay paying Stamp Duty on off-the-plan properties for 12-months
How much could the NSW first home buyers package save you?
With all the concessions combined, you could save a lot. Here’s your best-case scenario.
If you’re purchasing a newly-built first home for $600,000 with a $50,000 deposit, you could end up saving a massive $34,361 through:
- Stamp Duty exemption (including LMI duty abolition) = $24,361
- First home owners’ grant = $10,000
Total = $34,361
Ready to find the best home loan rate for your first home? See how Joust can help here.