First home buyers

The stars are aligning for first home buyers with the NSW Government announcing a comprehensive package of measures to support first home buyers by providing stamp duty exemptions, boosting housing supply and delivering infrastructure to support growing communities across the State.

The package to improve housing affordability is focused on helping first home buyers, who often face strong competition from investors.

For first home buyers, this comprehensive package will:

  • Remove stamp duty on all homes (new and existing) up to $650,000
  • Provide stamp duty discounts for homes (new and existing) up to $800,000
  • Provide a $10,000 grant for builders of new homes up to $750,000 and purchasers of new homes up to $600,000
  • Remove insurance duty on lenders’ mortgage insurance (LMI) https://www.mintequity.com.au/news/what-is-lenders-mortgage-insurance
  • Charge foreign investors higher duties and land taxes
  • Remove the ability for investors to defer paying stamp duty on off-the-plan purchases.

These changes are effective from 1 July 2017.

First Home Buyers now have a competitive edge thanks to the NSW Government

First Home Buyers now have a competitive edge thanks to the NSW Government

Contracts dated prior to the commencement of these reforms will continue to be eligible for the same grants, concessions, and conditions for which they would have been eligible had these changes not occurred.

Finance for First Home Buyers

Ideally, saving a deposit for the purchase of a property is the preferred method, however there are other options available for those who looking to get into the property market.

Family guarantees otherwise known as ‘family pledge’ or ‘parental guarantee’ can help buyers who don't have savings for a deposit, by accessing the equity in a parent or another close family member's house to help secure the loan.

To learn more about this finance option read How do family guarantee home loans work article.

First Home Owners Grant (New Homes)

In addition to the stamp duty exemptions, First Home Buyers who are buying brand new homes continue to receive the new homes grant.

  • First home buyers building a new property will be entitled to a $10,000 grant on homes worth up to $750,000.
  • First home buyers purchasing a new property worth up to $600,000 will be entitled to a $10,000 grant.
  • This policy aims to provide assistance to first home buyers and stimulate the construction of new dwellings.
  • The $5,000 New Home Grant Scheme, which was available to other buyers including investors, will be closed.

Helpful links

NSW Government First Home Buyer Projects and Initiatives

Office of State Revenue First Home Buyer Concessions

First Home Buyer Assistance Scheme

First Home Buyer Assistance Scheme Form

steps to buying your first home

  1. Know what you want to buy. Is it a house or a unit and in what location?
     
  2. Find out the average price of what you want to buy. Check ‘sold’ property prices – not the listed prices.
     
  3. Do you have enough savings for a deposit?
    A good guide is between 5% and 10% of the price plus another 5% for associated purchase costs (ie, stamp duty, legals). Don’t worry, if your savings are close but aren’t quite there yet, we can help you find a good deal and let you know about government incentives. Family guarantees may also be an option.
    Note; If Mum and Dad have equity in their property (owe less than the value of the property), they could help you top up your deposit.
     
  4. Get pre-approved finance - now is the time to work out how much you can borrow – before you go house shopping! Give us a quick phone call and we can run through what property you could purchase. We’ll also find out what is important to you and source the best loan.
    Note: This part can get pretty scary. If you don’t have your pre-approved finance ready before you go house hunting, you have no negotiating powers and could lose your dream home because someone else snapped it up while you were still filling out forms. 
     
  5. Go house shopping! Once you have pre-approved finance, you know exactly what you can spend. Say goodbye to your Saturdays, you’ll now have to find your perfect pad.
     
  6. Now that you’ve found the right property or a few of them, ask us for your complimentary Property Research Report on the property/ies you’re looking at. This will give you the info on, how long it’s been on the market, how many agents it’s been listed with, comparable properties that have recently sold, and… a recommended price guide.
    Having this information will give you super confident negotiating powers – well maybe not, but you’ll at least be able to combat any real estate spin.
     
  7. Make an offer (within your pre-approved guidelines of course!).
     
  8. Once your offer is accepted you need to move quickly! You only have five (5) business days* from signing the Contract for Sale and paying 0.25% holding deposit to get unconditional approval on your loan. Unconditional approval means the bank is committed to giving you money for the property you have chosen. Let us know straight away that you’ve signed the contracts and we’ll get the formal documentation moving.
     
  9. Now that you have unconditional approval (and not before!!) – you can now pay the remaining 9.75% deposit.
     
  10. Usually 6 weeks after you signed the contract, it’s settlement time. This is where you take ownership of the property and your loan becomes a reality. You might need to start cutting back on the lobster and caviar. Seriously, congratulations on your new home!

 * Cooling off period is usually only 5 business days, however in certain circumstances you can extend this.