Changes to Stamp Duty for First Home Buyers

The most valuable asset most people own is their own home. For first home buyers, Sydney’s market can be especially daunting, particularly when considering the additional costs that come on top of the value of the purchase. On July 1, 2017, the New South Wales government introduced three key changes to regulations governing real estate purchases and building on newly purchased land.

Stamp Duty

Stamp duty is payable on the purchase price of the property at the time of your purchase. From 1 July 2017, stamp duty for first home buyers on the purchase of new or established properties under $650,000, has been abolished, reducing the cost of the purchase by up to almost $25,000. New home buyers also have reduced stamp duty for purchases within the range of $650,000 to $800,000.


Insurance Duty on Lender’s Mortgage Insurance

A lender’s mortgage insurance is a premium payable by the borrower that protects the lender against the potential loss they may incur if the borrower is unable to repay their home loan. In general, the purchaser is required to take out Lender’s Mortgage Insurance if borrowing more than 80% of the value of the property for standard loans, or 60% of the value of the property for ‘Low Doc’ loans.

Until June 30, 2017 stamp duty of 9% was payable on the insurance premium for all purchasers. However, from until July 1, 2017, the duty was abolished for first home buyers.


First Home Owners Grant for new homes

From July 1, 2017, two new state government grants to promote the purchase or construction of new homes were introduced.

First home buyers are now entitled to a $10,000 grant on purchases of new homes valued up to $600,000. First home buyers building a new home up to $750,000 are also now entitled to a $10,000 grant. The New Home Grant Scheme, which entitled buyers (new and otherwise) to $5,000 on some purchases, has been discontinued.



For help with purchasing your property, phone ACCLAIM LEGAL on 9744 0722.

© Michael Hume 2017