NSW First Home owner incentives and grants

Written by Ronald Pratap

on August 7, 2020

NSW First Home owner incentives and grants

There are a number of options available to FHB’s and we break them down and give you the main facts you should know before taking this into account when looking for a property.

First home owner grant

If you’re a first home buyer and you’re buying or building a new home, you may qualify for a $10,000 grant under the First Home Owner Grant (New Homes) scheme if you purchase date was on or after 1 January 2016.

You can make a claim for the First Home Owner Grant if your:

  • newly constructed home or a substantially renovated home has a total value less than $600,000
  • land for building and any dwelling you intend to build has a combined value less than $750,000.

HomeBuilder

HomeBuilder provides eligible owner occupiers with a grant of $25,000 to build a new home, substantially renovate an existing home or buy an off the plan home/new home. A new home is one that has not previously been sold or occupied as a place of residence, (e.g. spec build) and where construction commenced on or after 4 June 2020 at a limit of $750,000.

Applicant(s) must be below one of the following two income caps

  • $125,000 per annum for an individual based on either your 2018-19 or 2019-20 taxable income, as shown on your notice of assessment issued by the Australian Taxation Office or
  • $200,000 per annum for a couple based on either your combined 2018-19 or 2019-20 taxable income, as shown on your notices of assessment issued by the Australian Taxation Office.

$750,000 limit for new builds

HomeBuilder Applications cannot be submitted until the online portal goes live.

Stamp duty increased for NSW first home buyers to boost construction

Under the changes, the threshold for stamp duty being charged on new homes for first home buyers will increase from the current $650,000 to $800,000, with the concession reducing on higher values before phasing out at $1 million. The stamp duty threshold on vacant land will also rise from $350,000 to $400,000 and will phase out at $500,000.

The change to the thresholds will only apply to newly-built homes and vacant land, not to existing homes, and will last for 12-months, starting on August 1 2020

First Home Loan Deposit Scheme

What is it?

The First Home Loan Deposit Scheme is designed to get eligible buyers into their first home sooner without having to pay lender’s mortgage insurance.

How does it work?

Eligible applicants will receive a limited guarantee from the Australian Government to purchase their first home with a deposit of as little as 5%

When’s it available?

New Scheme places are released at the start of each financial year, with the latest release on 1 July 2020. There are only certain banks that are able to access this government initiative with NAB and CBA are able to support up to 5,000 customers each to purchase their first home through the Scheme with another 10,000 spots available to second tier lenders.

  • All applicants must be First Home Buyers and must not have owned or had an interest in residential property (whether as an investment or owner occupied).
  • Individual applicants must have earned less than $125,000 or $200,000 for couples in the last financial year (as evidenced on your ATO Notice of Assessment).

 

Depending on your situation and the property you are purchasing, you may qualify for all four benefits or you may only be eligible for certain benefits.

While we have pointed out the main benefits and certain eligibility criteria of the government initiatives, there is a number of factors that may impact your ability to qualify.

It is best to ensure you work with your finance professional to understand where you stand as time-frames of build, contract types, lodgement of tax returns and documentation all come into play with the above incentives.

 

For further information or if you would like to discuss your options and look at your borrowing power, contact our Oran Park office on (02) 9188 1547 or email admin@rpwealthmanagement.com.au

We service the Macarthur  and wider West Sydney region  with clients in Parramatta, Liverpool, Penrith, Campbelltown, Camden and Sydney City.

For further information please visit:

https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer

 

 

The material shown in this article is for general information purposes only. It is not intended to be, nor should it be read as specific personal investment or risk advice.
Before acting on any of the information contained in this article you should obtain special advice from a specialist investment or lending  professional, which is appropriate to your specific investment or risk needs, objectives and financial situation.
Whilst all care is taken in the preparation of this material, no warranty is given with respect to the information provided, and accordingly no responsibility for errors or omissions, including responsibility to any person by reason of negligence is accepted by RP Wealth Management.

Ronald Pratap

Principal Financial Planner at RP Wealth Management | Financial Planning l SMSF I Insurance l Property Advisory. Our purpose is to provide our clients with sound advice and direction to assist with their financial affairs and help them make the best choices in achieving what is important to them.

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