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Stamp Duty Exemption in NSW: Buying Your First Home

March 4, 2024
Read Time:
4 mins
Author:
Inovayt

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If you’re a first home buyer or meet other select criteria in NSW, you may be eligible for a stamp duty exemption. In NSW, stamp duty is commonly referred to as transfer duty. This significant cost applies to anyone purchasing property (including land) and can come at a hefty price, making it difficult for first time buyers to break into the market.

By utilising government grants, first home buyers can get a foot into the property market sooner. 

What is transfer duty, and how is it calculated in NSW?

In NSW, transfer duty applies when you buy or transfer property. It’s charged on dutiable transactions – such as signing a contract to buy or sell a house or purchase business assets.

When you purchase a home, you need to have it transferred into your name before you can legally own it. Unfortunately, transfer duty is often expensive and is one of the hidden costs of buying a house.

There isn’t one set price for stamp duty – it is calculated based on the property you purchase. Some factors can impact how much stamp duty you pay. These factors include:

  • Only a part of a property is transferred (e.g. 50 per cent).
  • A home concession applies to the transaction but includes land not for residential purposes.
  • Several people acquire an interest in property; some pay the concessional duty rate, while others pay the full rate (mixed and multiple claims).
  • Multiple transactions are part of the same arrangement, which can be assessed as if they were one transaction.
  • An exemption applies, which could result in you paying no duty at all.

Interested to know how much stamp duty you might pay? Take a look at our free NSW stamp duty calculator

 

Why do we pay transfer duty?

It’s such a significant cost, so why do we have to pay stamp duty? Essentially, the government uses the earnings generated from transfer duty to support fundamental services and infrastructure, such as healthcare, education, and transport. It helps to control the property market by discouraging speculative investments, therefore preserving balance in the market dynamics.

NSW transfer duty explained

In NSW, eligible buyers can apply for a transfer duty exemption – a government incentive to relieve some financial stress. In NSW, this exemption means that the buyer or transferee may not have to pay the full or a portion of the stamp duty amount, subject to specific conditions or circumstances. 

These exemptions are generally implemented to support particular groups, encourage specific property transactions, or encourage entry into the property market, especially for first-time homebuyers.

For example, the First Home Buyers Assistance Scheme in NSW provides eligible first-time homebuyers with a partial or complete exemption from transfer duty on their first home purchase.

It’s important to note that the conditions, eligibility criteria, and available exemptions may vary. To get the most accurate and up-to-date information, individuals should refer to the latest guidelines provided by the NSW Government or seek professional advice to understand the specifics of any current transfer duty exemptions.

stamp duty exemption in nsw

Buyers stamp duty concessions and exemptions available for property buyers in NSW

There are a few types of transfer duty exemptions available in NSW. These include the following: 

First home concession

The first home concession is for those purchasing their first home. You can claim a first home concession on transfer duty if you meet specific criteria. The first home concession in NSW only applies to a home valued under $800,000, saving you up to $30,735.00. The home concession may still be available to eligible properties over this amount.  

To claim a concession, you do need to meet select criteria. These criteria include:

  • You must be an Australian citizen or permanent resident.
  • You must be legally acquiring the property as an individual. 
  • You must not have claimed the first home vacant land concession before. 
  • You must never have held an interest in a residence anywhere in Australia or overseas. 
  • You must be at least 18 years old. 
  • You must move into and live in the house within one year of the settlement.
  • You must not sell, transfer, lease, or grant exclusive possession of all or part of the property before moving in. 

First home vacant land concession 

The first home vacant land concession is for claiming a transfer concession when purchasing vacant land on which to build your first property. The first home vacant land concession applies to vacant land valued under $450,000 and can save you up to $10,495.

To be eligible for the first home vacant land concession when you buy or acquire land in NSW, you must meet the following eligibility criteria: 

  • You must be an Australian citizen or permanent resident.
  • You must be legally acquiring the property as an individual. 
  • You must not have claimed the first home vacant land concession before.  
  • You must never have held an interest in a residence anywhere in Australia or overseas. 
  • You must be at least 18 years old. 
  • You must move into and live in the house within two years of settlement.
  • You must only build one home on the land. 
  • You must be sure there is no building, or part of a building, on the land when you acquire it.
  • Before moving in, you must not sell, transfer, lease, or grant exclusive possession of all or part of the property.

How can an Inovayt mortgage broker help you with a stamp duty exemption in NSW?

At Inovayt, we want to get you into your new home faster. If your transfer duty fee is a looming hurdle in your property-buying journey, we’re here to help. Our team remains up to date with the latest changes in government policies, including exemptions and concession fees. If you’re unsure if this will impact you, contact one of our local mortgage brokers today. 

Ready to buy a home in NSW? Let us help.

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