Home LoanHow to Avoid Stamp Duty in NSW: A Comprehensive Guide

June 6, 2024

Paying a stamp duty when buying a home in Australia is required before owning your dream house. It is a one time government transfer duty being charged when a house or property is being sold to another person. Stamp duty needs to be considered when calculating your budget in buying your first house. It can be around four to five percent of the property value but the particular amount of stamp duty you’re obligated on a property is regulated by the duty rates in the state where you are buying. These rates are mostly ranked so the higher the selling price, the higher you will pay in stamp duty.

Properties Subject to Stamp Duty

In New South Wales (NSW), stamp duty applies to the following types of property transactions:

  • Residential homes
  • Investment properties
  • Vacant lots
  • Farming land
  • Businesses that include land
  • Commercial properties

Stamp Duty Exemptions and Discounts

Fortunately, several exemptions and discounts are available, especially for first-time home buyers. These can significantly reduce the financial burden of purchasing a home. When planning your budget, it’s vital to account for deposit, stamp duty, council fees, mortgage application, registration fees, and ongoing home loan repayments. Knowing which exemptions and discounts you qualify for can help you save a substantial amount of money.

Here’s our stamp duty calculator and see how much you could be paying.

To qualify, first-time home buyers must meet specific criteria, including property value thresholds and residency requirements.

Key Schemes to Avoid Stamp Duty

1. First Home Owner Grant (New Homes)

This grant provides a one-time payment of $10,000 to first-time home buyers purchasing or constructing a new home. Eligible properties include newly built houses, townhouses, apartments, units, and properties bought off the plan or substantially renovated.

To qualify:

• The property must be new.
• The buyer must be an Australian citizen or permanent resident.
• The home’s value must meet specific thresholds.

2. First Home Buyers Assistance Scheme

The NSW government’s First Home Buyer Assistance Scheme offers significant benefits to first-time home buyers:

  • Full exemption from transfer duty for homes (new and existing) up to $800,000.
  • Discounted duty rates for homes valued between $800,000 and $1,000,000.
  • Full exemption for vacant land valued up to $350,000.

Requirements include:

  • The buyer must move into the property within 12 months of the agreement or completion date and live there for at least six months.
  • The total value of the property must not exceed the specified limits.

3. First Home Guarantee

This scheme allows first-time home buyers to purchase or construct a new home with as little as a 5% deposit. Single parents may qualify with a 2% deposit. This guarantee is backed by the National Housing Finance and Investment Corporation (NHFIC), which eliminates the need for Lenders Mortgage Insurance (LMI).

Eligibility Criteria for Stamp Duty Exemptions in NSW

To qualify for stamp duty exemptions in NSW, applicants must:

  • Be at least 18 years old.
  • Be Australian citizens or permanent residents.
  • Ensure at least one applicant in a married couple is a permanent resident.
  • Purchase an eligible property (existing home, new build, or vacant land).
  • Not have previously owned property in Australia.
  • Move into the home within 12 months of settlement and live there for at least six months.
  • If serving in the Australian Defence Force, the residency requirement may be waived, provided you and your partner are on the NSW electoral roll.

If you are still unsure if you are qualified to avoid stamp duty, you can check here to find out.

Application Process for First Home Buyer Assistance Scheme

Applying for these schemes is straightforward if you meet the qualifications. Follow these steps:

  1.  Download and complete the First Home Buyer Assistance Application Form.
  2. Lodge your application and identity documents with your lawyer or conveyancer.

Australian Financial and Mortgage Solutions (AFMS) and Stamp Duty

AFMS Group gives personalised deliberation to evaluate each client’s financial standing and housing plans. Our experts dedicatedly work with first time buyers to better understand their sole situations and come up with solutions to avoid stamp duty in NSW.

We maintain current updates of stamp duty exemption policies for both federal and state levels in Australia. We are sure that our team is competent in the eligibility requirements, application process and any recent updates to ensure that our clients have accurate and prompt advice.

We assist first time buyers in making up strategic plans to avoid stamp duty in NSW. This may include prospecting different property options, organising the purchase to enhance savings and synchronising with other financial incentives or grants.

We also provide all-inclusive support with documentation requirements for receiving stamp duty exemptions. Our team guarantees that all important paperworks are completed correctly and submitted in a timely manner to facilitate a smooth transaction process. Contact AFMS Group now to schedule a consultation with one of our experts.