14 June 2023
Changes to first home buyer assistance and other NSW housing grants
Expansion of the First Home Buyer Assistance Scheme
There are changes coming for First Home Buyers in NSW, with the Government expanding the First Home Buyer Assistance Scheme (FHBAS) from 1 July 2023.
In this raft of changes from 1 July, the transfer duty exemption threshold for new and existing home purchases by eligible first home buyers will increase from $650,000 to $800,000, and the concessional rate will increase from $800,000 to $1 million.
First Home Buyer Choice Scheme will be scrapped from 1 July 2023
The Government is also closing off access to First Home Buyer Choice (FHBC).
This legislation that was passed in November 2022 by the former Coalition state government, allowed first home buyers who were purchasing property worth up to $1.5m the choice to pay an annual land tax instead of paying stamp duty upfront. At the time, Labor opposed the scheme and has since introduced legislation to scrap it, after labelling it “a forever tax on your home”.
Access to this scheme will be closed off on 1 July 2023 when the new and expanded stamp duty rules come into force. The Government says this new legislation will also place tighter controls around first home buyer concessions, by adding an eligibility requirement that purchasers live in the home for at least a year. The previous requirement was for buyers to live in the property for six months.
Purchasers who exchange contracts on or before 30 June 2023 have up until settlement to opt-in to FHBC. From 1 July 2023 there will be no option to choose between property tax and transfer duty on new purchases.
Customers who have opted into FHBC will continue to pay property tax for as long as they own that property and will remain exempt from transfer duty on that purchase.
First homebuyers purchasing a home for $1 million or more on or after 1 July 2023 are ineligible for transfer duty exemptions or concessions and will be required to pay transfer duty.
Additionally, the residence requirement will change for the following:
- First Home Buyers Assistance scheme
- First Home Owner grant
- Deferral of transfer duty payment for off the plan transactions
- Exemptions for tenants of the Department of Housing and Aboriginal Housing Office
For contracts entered into on or after 1 July 2023, purchasers under the above schemes, grants or exemptions must move into their homes within 12 months of settlement and live in the property for a continuous 12-month period to satisfy the residence requirement.
As always, please get in touch if this article raises questions or concerns. We are here to assist you and help you understand how these changes will impact your buying or selling situation.
