It is easy to get overwhelmed when considering buying a house in the real estate market today. Just looking at the price of homes can leave you giddy. However in saying that, there are multiple government incentives and schemes put in place to alleviate some of the pressure for new and first home buyers saving you thousands of dollars. Something that may seem unachievable becomes less that way with a little help. We want to explore two such incentives that coincide with each other, The First Home Owners Grant NSW 2020, and the First Home Buyer Assistance Scheme.
What is the First Home Owners Grant?
The First Home Owners Grant NSW 2020 is a Government-funded payment designed to help eligible first home buyers and owners with costs associated with the purchase of a house by offering a sum of $10,000. This money can help as a buffer against transfer duty (stamp duty), legal fees or can be added to a deposit. The two main goals of the package are to improve the affordability of housing in NSW, focusing on first home buyers by giving them a better opportunity to get a foot in the door and also to promote the building of new homes.
The Grant of $10,000 is offered to aid in the purchase of a new home of up to $600,000 or building of a new home up to $750,000. But what falls under the classification of a new home in NSW? A new home is defined as:
- A residence that has not previously been lived In by any occupant, including the builder of the house or a tenant.
- A property that has not previously been sold as new
- A new build, including a knock down rebuild (as long as after completion it has not been lived in)
While this sounds great to be eligible for the grant, you must meet all of the following criteria. Applicants must be over the age of 18 and be a permanent resident of Australia, or Australian citizen. Applicants must not have received the grant previously in any state in Australia, and finally, applicants must live continuously in the residence for a period of no less than 6months. There are also criteria that the property itself and purchase-related transactions must meet. These are that the contract must be made after 2016, the home must be brand new (as previously defined) and fall under the $600,000 cost price.
The other benefit to coincide with The First Home Owners Grant NSW 2020 is the First Home Buyer Assistance Scheme. This scheme strives to alleviate the pressure of being a new homeowner even more by abolishing transfer duty (stamp duty) completely on homes valued up to $650,000 and only paying a concessional rate if the value sits between $650,000 and $800,000. The transfer duty discounts are not only applicable to homes. When it comes to vacant land, no transfer duty is payable on land valued at up to $350,000 and a discounted rate is payable between $350,000 to $450,000. Transfer duty is a tax paid to have a property transferred into your name and is paid based on the property’s sale price or its current market value, whichever is higher. As such paying a discount on this or not having to pay at all can mean big money is saved.
The only question that remains is how to apply for these NSW government incentives.
The 3 main ways homeowners can apply is through their lender or bank, conveyancer or solicitor and directly via the SRO (state revenue office). Unlike applying through a secondary party, applying directly via the SRO means that the home has to be finished, and the title has to be registered under your name.
Any lodgements have to be made within a 12month time period of settling or completion.
We hope this quick and general guide on current grants and schemes available to new home buyers has shed some light on money that can be potentially saved by building a new home and taking advantage of the aforementioned incentives. Hopefully though that the thought of building a new house a slightly less daunting and strenuous one.