Last Updated: 1 July 2017 (Following the State and Federal Budget Announcements)
Benjamin Franklin once said that ‘in this world nothing can be said to be certain, except death and taxes’. The reality is that it is not all doom and gloom especially if you know what concessions or exemptions are available to you when buying or building a new home. Know what is available and take advantage of it!
So firstly, what is stamp duty? In simple terms, stamp duty a tax imposed by the state government on amongst other things, the purchase of property (including land and established houses). Stamp duty is paid by the purchaser and is generally required to be paid on the earlier of settlement and three months from the date of exchange of your contract.
Now you know what stamp duty is, are there any grants for first home buyers or those building new homes? Of course there are. The NSW state government currently has a number of grants and schemes available. These include:
The First Home - New Home scheme gives eligible purchasers an exemption from stamp duty on new homes (and existing homes) valued up to $650,000 and concessions for both new and existing homes valued between $650,000 and $800,000.
Eligible purchasers buying a vacant block of residential land to build their dream home will also be exempt from stamp duty on vacant land valued up to $350,000, and will receive concessions for vacant land valued between $350,000 and $450,000.
The First Home Owner Grant (New Homes) scheme allows eligible first homeowners to purchase a new home or build their dream home on their block of land by offering a $10,000 grant.
From 1 July 2017, the First Home Owner Grant Cap for new home purchases is reduced to $600,000. This includes off the plan purchases or Contracts that are subject to the completion of the house (also known as 10/90 Contracts - 10% deposit on exchange and 90% on the completion of the home). However, if you purchase a block of land and enter into a separate contract to build, or are an owner builder the threshold is increased to $750,000. That is, your total land cost and build cost must not exceed $750,000.
IMPORTANT: If you want to get both the Grant and the Exemption, then you must either buy "off the plan" for a purchase price of no more than $600,000 OR buy vacant land for no more than $350,000 and build separately with a total value of no more than $750,000 (being land and build). Confused?! Make sure you don't get caught out. Chat to one of our myBuildcompare consultants for more information.
The New South Wales New Home Grant scheme was introduced on 1 July 2012 to stimulate the construction of new homes. The scheme provides a grant of $5,000 towards the purchase of new homes, homes off the plan and vacant land on which a new home will be built. The grant can be used to offset the stamp duty you are otherwise liable to pay and is available to all Australian residents once every financial year.