Often considered one of the most expensive states in Australia to purchase a property within, saving up for a first home in New South Wales is not without its challenges. To ease some of the financial burden, there are a number of helping hands in the form of government schemes available to help you achieve the great Australian dream sooner, rather than later.

New South Wales provides a number of support schemes for first home buyers looking to enter the property market including its First Home Owner Grant and First Home Buyer Assistance scheme. Below we will focus on breaking down the components of the First Home Owner Grant in New South Wales to identify how the grant works, eligibility and the types of homes that can be purchased.

How the First Home Owner Grant works in NSW

The NSW First Home Owner Grant (FHOG) is valued to the tune of $10,000 for properties valued up to $600,000.

If you purchase vacant land and sign a building contract with a builder then the NSW Government Revenue Office will add the value of the vacant land together with the value of the comprehensive home building contract plus the cost of any building variations done together. The total combined cost must not exceed $750,000.   

To be eligible, the home must not have been previously sold or occupied. 

The FHOG can be used towards your deposit but given it’s only $10,000, it likely won’t be enough to cover the full deposit and you’ll have to come up with the rest out of your savings.

In order to avoid paying Lenders Mortgage Insurance (LMI) you’ll have to come up with a 20% deposit, and lenders still want to see that you’ve genuinely saved most of the deposit.

Stamp Duty

Stamp duty is a major barrier to first-time buyers all across Australia, and NSW is no exception. First home buyers in NSW can qualify for stamp duty relief through the First Home Buyer Assistance scheme.

The First Home Buyer Assistance Scheme provides a concessional rate of stamp duty and even a total exemption altogether for some first home buyers. This applies to existing homes as well as new homes and vacant land.

New homes

Existing homes

Vacant land

  • 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.

  • 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, apply for a concessional transfer duty rate. The amount will be based on the value of   your home.

  • 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.

The rate of discounts that apply will depend on the property’s value. See the NSW Department of Revenue for more information on how these discounts work.

What homes can be purchased using the grant?

To take advantage of the FHOG in NSW, eligible homes can be a house, townhouse, apartment, unit or similar that is newly built, purchased off the plan or substantially renovated.

In similar fashion to other states and territories, the FHOG in NSW is not available for those looking to buy an investment property or holiday home.

First Home Owner Grant eligibility

There are a number of conditions first home buyers in NSW must meet before they can be deemed eligible to receive the NSW FHOG of $10,000.

These include:

  • You must be an individual, not a company or trust.
  • You must be aged over 18.
  • You, or at least one person you’re buying with, must be an Australian citizen or permanent resident.
  • You and your spouse must not previously have owned a home in Australia or received an Australian First Home Owner Grant.
  • You’ll need to live in your first home for at least six months within 12 months of buying or completion of construction.

You may still be eligible for the FHOG in NSW if you’ve previously owned a residential property but you haven’t lived in it for more than six months.

If you are unsure whether you qualify for the NSW FHOG, you can use this online resource to assess your eligibility.

Applying for the First Home Owner Grant

If you require the grant for settlement or first drawn down/progress payment, you must lodge your application with the approved agent who is providing you finance.

Applying through NSW Department of Revenue

Applicants must lodge within 12 months of settlement or the completed construction date of your new home.

Applying through an Agent

If you’re applying through an approved agent, you’ll need to complete the First Home Owner Grant (New Homes) Application form. The agent will lodge your application form on your behalf after you have ticked the declaration box, printed your name clearly and dated the form.

You can also apply for the First Home Owner Grant through your bank or financial institution when you’re arranging finance.

Some supporting documents that you will need for the application form include:

  • A copy of your land sale contract (dated and signed by the vendor).
  • A title search that shows you as the registered proprietor of the land.
  • A statement from the vendor or their legal representative as evidence that the house hasn't been occupied since the completion of construction.
  • If choosing to construct your home on vacant land, you will need to provide evidence of the total value of the property.

Alternative schemes to NSW First Home Owner Grant

First Home Guarantee

The First Home Guarantee (FHBG) is an Australian Government incentive for first home buyers looking to purchase their first home. The scheme offers first home buyers the ability to purchase a home with a deposit as low as 5%, without the need to pay Lenders’ Mortgage Insurance (LMI). This means you can borrow up to 95% of the property value, with the federal government providing the lender with a guarantee of up to 15%.

The FHBG is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government, offering 35,000 places for Aussies across the country each financial year until 30 June, 2025.

Regional First Home Guarantee

The Regional First Home Buyer Guarantee Scheme is identical to the First Home Guarantee, except it is designed to target first home buyers in regional Australia.

With the Regional First Home Guarantee, 10,000 guarantees each year will help first-home buyers purchase a regional home with as little as 5% loan deposit without having to pay LMI. This means you can borrow up to 95% of the property value, with the federal government guaranteeing up to 15%.

Family Home Guarantee

The 'Family Home Guarantee' allows 5,000 single parents each year to qualify for a home loan with as little as a 2% deposit without having to pay LMI. The government will guarantee up to 18%.

The scheme, which was introduced in the 2021/22 Federal Budget, is available to previous owner-occupiers as well as first home buyers; has a maximum annual income cap of $125,000; must be for principal & interest (P&I) repayments, and for loans no longer than 30 years. 

Read more about First Home Owner/Buyer Grants:

Article first published 11 June 2021 by William Jolly, updated 30 September 2022.

Photo by Lynda Hinton on Unsplash

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