First Home Owner Update – What’s Changing on July 1
From July 1, 2023, the New South Wales Australian Labor Party (ALP) will implement changes that will impact the way many first home owners purchase property. To make the transition easier, we’re going to run you through some of these changes and how they could impact you.
Stamp Duty Concessions
The ALP will introduce changes to stamp duty for first home buyers. Currently, first home buyers are exempt from paying stamp duty on properties valued up to $650,000, and receive a concession on properties valued between $650,000 and $800,000.
From July 1, 2023, these thresholds will be increased to $800,000 and $1 million respectively, providing even more support for those looking to purchase their first home.
Changes to the First Home Owner Grant
On July 1, the First Home Owner Grant will be increased from $10,000 to $25,000 for eligible first home buyers purchasing a newly constructed home or an off-the-plan property. This grant will be available for properties valued up to $1 million, and will provide a significant boost to those trying to get into the property market.
Removal of the Home Buyers Buyer Choice Scheme
Under the newly elected Minns Labor Government, the NSW Government will now abolish the First Home Buyer Choice scheme, reverting to the new stamp duty concessions as mentioned above.
Over 4,200 First Home Buyers had selected the First Home Buyer Choice options since it was rolled out in November 2022.
For those First Home Buyers who had already selected the property tax option there will be a grace period and it would be unlikely that the new NSW government would reverse any existing arrangements. We will continue to monitor this and keep you updated.
First Home Guarantee Eligibility to Expand
Previously, the First Home Guarantee and Regional First Home Guarantee Schemes were restricted to married and single people, as well as those in defacto relationship who were also Australian citizens at the time of application.
From July 1 this year, the Home Guarantee Scheme will expand, allowing permanent residents to access the scheme as well as allowing friends, siblings and other family members to jointly apply for the guarantees. These schemes will also be available to non-first home buyers who have not owned a property in the past 10 years.
For both of these schemes, the federal government acts as a guarantor on up to 15% of the loan. This enables eligible buyers to purchase a home with as little as a 5 percent deposit, eliminating the need for lender’s mortgage insurance.
Family Home Guarantee Changes
The criteria for Family Home Guarantee applications will also be expanded beyond just single natural or adoptive parents with dependents. This means that the guarantee will be available to eligible borrowers who are single legal guardians of children, such as aunts, uncles and grandparents.
Under the Family Home Guarantee, the federal government acts as a guarantor on up to 18% of the loan. This enables eligible buyers to purchase a home with as little as a 2 percent deposit, eliminating the need for lender’s mortgage insurance.
The availability of this guarantee will also expand to include permanent residents in addition to Australian citizens.
How do I know if I’m eligible?
Our team will help you identify which Guarantees could be applicable to you under the Home Guarantee Scheme (HGS)
We’ll help you find the right path to owning your own home and will be with you every step of the way. To get started, simply get in touch to organise a call or meeting.