When you buy a house for another party you will need to pay Transfer Duty (formerly known as Stamp Duty). However, if you’re a first home buyer in NSW you will only pay a concessional rate or no Duty at all if you meet a set of criteria.
If you are over 18, purchasing the home in your name or with your partner, not in a company or trust; and if you and your partner have never have owned or co-owned residential property in Australia, you should be entitled to a concessional rate of transfer duty or even an exemption from paying it altogether under the First Home Buyers Assistance scheme (FHBAS).
The purpose of the scheme is twofold. To help you own your first home and also to boost economic activity, which is why it gives more support to those building a brand-new home. This can be a new apartment or new house.
Purchasing an existing house or apartment
If you are looking to purchase an existing apartment or house you can still do this and enjoy some concessions:
- 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, and apply for a concessional transfer duty rate. The amount will be based on the value of your home.
Building a new home
If you are looking to build a new house, house land packages or settle on a brand new apartment purchased off the plan, you may be eligible for the following concessions:
- Buy a new home valued at less than $800,000, apply for a full exemption, and pay no transfer duty.
- Buy vacant land on which you intend to build a home, you won’t pay transfer duty if your land is valued at less than $400,000.
- Buy vacant land on which you intend to build a home, for land valued between $400,000 and $500,000, you’ll receive a concessional rate.
Who does the scheme apply to?
The FHBAS applies to:
- buying an existing home
- buying a new home
- buying vacant land on which you intend to build a home.
How do I qualify?
To qualify for the FHBAS:
- The contract date must be on or after 1 July 2017 and must be for the whole property. Note: To be eligible for the increased transfer (stamp) duty threshold available between 1 August 2020 and 31 July 2021, the contract date must be on or after 1 August 2020 and on or before 31 July 2021.
- You must be an individual, not a company or trust
- You must be over 18
- You, and your spouse or partner, must never have owned or co-owned residential property in Australia
- You, and your spouse or partner, must never have received an exemption or concession under this scheme
- At least one of the first home buyers must be an Australian citizen or permanent resident.
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Important Information
The views of these experts are not necessarily the views of Raiz. Please consider your own financial goals and circumstances when making an investment.
The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the product.
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The information may be based on assumptions or market conditions which change without notice. This could impact the accuracy of the information.
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