The NSW Government First Home Plus Scheme finished on 31 December 2011.  Previously, first home buyers were able to receive a full exemption on stamp duty on house purchases up to $500,000, and partial exemption on purchases up to $600,000.

From 1 January 2012, a new scheme came into force – First Home Owner Grant (New Homes) scheme.  Under this scheme, first homebuyers will receive a $7,000 grant when purchasing an established property before 1 October 2012.  If you purchase or build a new property the grant is $5,000 up to 1 October 2012.

After 1 October 2012, the grant will only apply to who build or buy a NEW home and will increase to $15,000.  It then reduces to $10,000 from 31 December 2013.

The eligible date for the purposes of the grants/exemptions is contract date to build or purchase a home, or if an owner builder, the date the foundations commenced to be laid

 There are caps that you need to be aware of.  Up to 1 October 2012 under the First Home Owner Grant, you can buy or build a property valued up to $835,000 and be eligible for the $5,000 grant.  From 1 October 2012, the cap reduces to $650,000 to be eligible for the $15,000 grant.

In addition to the grant, there are stamp duty exemptions that apply when you build or buy a new home (if you are a first home buyer).  Full stamp duty exemptions apply for properties up to $550,000 and a partial exemption will apply for properties up to $650,000.  The stamp duty exemption also applies to land purchases with the intention to build a house to live in.  The land exemption is for purchases up to $350,000 and partial exemptions apply up to $450,000.

So in summary, for first home buyers in New South Wales:

• Buy an established property before 1 October 2012 and receive the $7,000 grant
• Buy an established property after 1 Ocober 2012 – get nothing, no stamp duty exemption and no grant
  
• Buy a new property or build a new property valued at less than $835,000 receive :
  - $5,000 up to 1 October 2012,
  - $15,000 from 1 October 2012 to 31 December 2013
  - $10,000 from 1 January 2013 onwards
  
• Buy or build a new property in NSW (up to $650,000 for houses and up to $450,000 for land purchase), and you may receive partial or full stamp duty exemption.

James Gerrard is a Financial Advisor in Sydney, NSW.  He has provided financial advice to many Sydney first home buyers and helped them plan their finances so that they can purchase their first property.  If you would like to meet with James in his Financial Planning practice for a free consultation about your situation, please go to www.financialadvisor.com.au.