Home LoanStamp Duty for First-Time Buyers: A Guide to Savings

April 17, 2024

Homeownership has been both important and attainable for Australians. As property values rise and wages decline, saving up cash for a twenty percent home loan deposit or down payment, interest rates and other added fees have rapidly become more difficult everyday for Australian citizens.

Many are stuck in renting their homes, spending the equal amount of a mortgage payment on monthly rent but unable to save the large up front fees required to buy a first house.

But luckily, there are new options for first home buying which can give a huge sigh of relief from terrible advance costs.

What is stamp duty?

You must pay stamp duty when buying a home in Australia. It is a one time upfront government transfer duty charged when a property or land is being sold to a different person.

Stamp duty must be thought of when calculating your budget. It can be around four to five percent of the property value. The specific amount of stamp duty you’re obligated on a property is determined by the duty rates in the state in which you are buying. These rates are usually ranked so basically, the higher the selling price, the more you will pay in stamp duty.

Go to our stamp duty calculator to learn how much you could be paying.

Is there a reduction in stamp duty costs for first time home buyers?

Most states give stamp duty exemptions and concessions especially for qualified first home buyers.When calculating how much you will need to save for your first home – deposit, stamp duty, council fees, mortgage application, registration fees and other ongoing home loan repayments, it’s necessary to know which exemptions and concessions are available.

The New South Wales government’s First Home Buyer Assistance Scheme offers first time home buyers an exemption from transfer duty for acquiring new and existing homes up to eight hundred thousand dollars and a concessional rate of duty for homes up to one million.

Here are the eligibility requirements:

  1. You must be a first home buyer – i.e. you must never have any purchased homes or lands before applying
  2. If you are with a partner, both of you must be first time home buyers. Buying a home valued at less than one million and fifty thousand dollars or vacant land worth eight hundred thousand dollars.
  3. You or your partner must be an Australian citizen or permanent resident
  4. You must be over 18
  5. You must have not currently received a first home buyer grant or duty concessions
  6. You must move in within 12 months of buying
  7. You must live in the property for at least 6 months

New research reveals impact of stamp duty increase

Stamp duty costs are increasing and the impact is showing to be becoming difficult for new home buyers. New research report here tells all.

Here are some Government Assistance and policies which will help first time home buyers:

  1. The First Home Owner Grant is one of the government assistance for buying a new home in Sydney. It aims to help qualified citizens and their families with the expenses of their first house.
  2. The First Home Loan Deposit Scheme is created to help new homeowners in Sydney. This initiative helps those who meet the requirements on getting a home loan without asking them to pay for LMI and only requires a deposit as low as five percent. When borrowers deposit less than twenty percent, LMI is normally required. This can add a considerable cost to the home buying process. Lenders are permitted to offer mortgages with lower deposits and no LMI since the government ensures a portion of the home loan under the FHLDS. This might help those who might find it difficult to make a larger down payment to become homeowners. It’s very important to remember that applicants must complete the program’s detailed requirements which include income and property price caps.
  3. HomeBuilder Grant was rolled out to support the building industry and help homeowners because of the financial calamity brought by the COVID-19 pandemic to Sydney. This grant can also assist Sydney homebuyers indirectly by developing the supply of new homes and encouraging construction activity even if its primary goal are those who are building their new homes or doing major maintenance in their homes.
  4. The government of New South Wales provides several options for stamp duty exemptions and concessions to at least reduce the financial burden on homebuyers, especially those who are buying their first house. For example in NSW, first-home buyers who meet specific requirements may be qualified for a complete stamp duty exemption on houses priced below a certain amount.

The Australian Financial and Mortgage Solutions Approach

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 maximise stamp duty exemptions.

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 support stamp duty exemptions usefully. 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.

Ready to unlock significant savings on your first home purchase?

Take the step on securing your first home with Australia Financial and Mortgage Solutions today. Do not get into the complexities of stamp duty exemptions all by yourself. Contact AFMS to schedule a consultation with one of our experts. We’ll help with your financial needs, discuss your homeownership goals and develop a specialised technique to enhance your stamp duty savings.