How to avoid stamp duty in NSW: A complete guide
- By Con Nicolaou
- Uncategorized
When buying a property in NSW, you’ll need to pay stamp duty to secure your dream home. Stamp duty is a one-time fee collected by the government to facilitate the property purchase.
It’s crucial to factor this cost into your budget. Typically, stamp duty ranges from 4% to 5% of the property’s value, so as the property’s price increases, so does the stamp duty cost.
In the state of New South Wales stamp duty applies to the following type of properties:
- Residential homes
- Investment properties
- Vacant lots
- Farming land
- Businesses that include land
- Commercial properties
But is it possible to decrease your upfront costs or avoid stamp duty altogether when buying a property in NSW ?
Here are three strategies to help reduce or avoid stamp duty costs in NSW:
- First Home Guarantee Scheme
- First Home Owners Grant (New Homes)
- First Home Buyers Assistance Scheme
Each scheme has its own distinct advantages. If you’re a first-time homebuyer and meet the eligibility criteria, you can apply for all three to maximize the benefits.
Consulting with a mortgage broker in Sydney can provide insights into how home equity loans might help you manage your overall financial strategy when purchasing property.
1. First Home Guarantee (FHG)
This scheme allows eligible first home buyers to purchase a property with as little as a 5% deposit and 2% for eligible single parents.
This government backed guarantee has been put in place to support eligible first home buyers enter the market at a reduced cost point, making it easier to save up to purchase a property.
It also comes with the added benefit of avoiding lenders mortgage insurance (LMI) which could save thousands off your loan amount.
For further information on how it all works please click here
2. First Home Owner Grant (New Homes)
This additional government benefit is aimed at first home buyers that purchase or construct a brand new home. It provides a once of payment of $10,000 to the eligible first home buyers.
To qualify you must meet the below criteria:
- Buying or building your first home.
- It’s a new home that no-one has lived in before.
- It’s worth no more than $600,000 (or, for a house and land package with comprehensive building contract, no more than $750,000).
- You must also move into the property within 12 months from settlement and live there for at least 12 continuous months.
For more information on the grant please click here
3. First Home Buyers Assistance Scheme
For eligible first home buyers the NSW government offers significant stamp duty savings for purchasing your property.
- Full exemption from transfer stamp duty for homes (new and existing) up to $800,000. ( A saving of $30,529)
- Discounted stamp duty rates for homes valued between $800,000 and $1,000,000.
- Full stamp duty exemption for vacant land valued up to $350,000.
In order to qualify for the above stamp duty exemption scheme eligible first home buyers must meet the below:
- Be at least 18 years old.
- Be Australian citizens or permanent residents.
- Ensure at least one applicant in a married/Defacto couple is a permanent resident.
- Purchase an eligible property (existing home, new build, or vacant land).
- Not have previously owned property in Australia.
- Move into the home within 12 months of settlement and live there for at least 12 months.
- Current permanent members of the Australian Defence Force (ADF) are exempt from the residence requirement if they are enrolled to vote in NSW.
- If you’re buying a home with friends or family (not your spouse or partner) the eligible first home buyer/s must be purchasing at least half of the property, and the ineligible buyer/s must pay transfer stamp duty on their share of the property.
*Individuals buying a property for investment purposes are not eligible for the scheme. However, if you purchase your first home, even if it has existing tenancies, and you intend to occupy the property yourself, you may still qualify for the stamp duty exemption if you meet the criteria mentioned above.
For more information about this scheme click here. And for additional eligibility support click here
How to apply
After you’ve exchanged contracts, you can apply for the FHBAS by downloading and completing the:
- First Home Buyers Assistance Scheme Application form
For contracts exchanged on or after 1 July 2023, use:
First Home Buyers Assistance Scheme Application form ODA 066B (PDF, 795.1 KB
For contracts exchanged on or before 30 June 2023, use:
First Home Buyers Assistance Scheme Application form ODA 066A (PDF, 793.71 KB) - Purchaser/Transferee Declaration form (individual) (PDF, 693.82 KB)
Note: These are interactive forms with declaration tick boxes in place of statutory declaration.
You need to lodge your application forms and proof of identity documents with your solicitor or conveyancer.
How can Freedom Finance Group help you
With over 15 years of industry experience, our Managing Director, Con Nicolaou, has helped countless individuals buy their first homes and avoid stamp duty costs.
Con is dedicated to guiding first-time buyers through every step of the process, offering a detailed, step-by-step guide from start to finish. He will find the loan that best suits your needs from a panel of over 40 lenders and explain all the government benefits you may be eligible for.
Con will also handle all the paperwork promptly, ensuring a smooth and stress-free settlement. Buying your first home can be overwhelming, but with Con and the Freedom Finance team, we’ll make the process enjoyable and straightforward.
Additionally, for those looking to maximize their investment, we can also help you explore the best home equity loans in Australia to make the most of your property.
