Property guide
First Home Buyer Schemes in NSW — A Plain-English Guide
NSW has several first home buyer assistance schemes operating simultaneously. Some reduce or eliminate stamp duty. Some provide a cash grant. Others reduce the deposit required or allow the government to take an equity share in your home. Understanding which schemes apply to your situation, and what the thresholds are, is an essential part of financial planning before you start making offers.
Stamp duty exemptions and concessions
Stamp duty (now called transfer duty in NSW) is one of the largest upfront costs in a property purchase — typically 3–4% of the purchase price for properties in the $800,000–$1,200,000 range. For first home buyers in NSW, two forms of relief are available.
Full exemption: first home buyers purchasing a property for up to $800,000 pay zero stamp duty. This applies to both new and existing dwellings.
Concessional rate: for properties between $800,001 and $1,000,000, first home buyers pay a reduced rate that tapers between zero (at $800,000) and the full transfer duty rate (at $1,000,000).
Above $1,000,000, no stamp duty concession is available. The first home buyer pays the standard transfer duty rate, which for a $1.1 million property is approximately $44,000–$50,000. This is a full additional upfront cost on top of the deposit, legal fees, and building inspections.
Property tax option (First Home Buyer Choice)
NSW introduced an option for first home buyers to pay an annual property tax instead of upfront stamp duty on properties up to $1,500,000. The annual tax is calculated as a fixed amount plus a percentage of the land value — in 2025-26, approximately $400 + 0.3% of the land value per year for owner-occupiers.
This option can significantly improve cash flow at settlement for buyers purchasing between $1,000,000 and $1,500,000, where the full stamp duty bill would otherwise be $40,000–$65,000 upfront. The annual property tax is instead paid quarterly and can be factored into ongoing cash flow rather than the deposit.
However, property tax has long-term implications: you pay it for as long as you own the property, and the savings vs. stamp duty break even after roughly 10–15 years depending on the property and land value. If you plan to sell or hold long-term, model both scenarios with a mortgage broker before choosing.
First Home Owner Grant (FHOG)
The NSW First Home Owner Grant (FHOG) is a $10,000 cash grant for buyers of new dwellings — including newly constructed homes, off-the-plan apartments, and substantially renovated homes. The $10,000 is paid by Revenue NSW at or near settlement.
The FHOG applies to new dwellings with a total value (contract price plus land if applicable) of up to $750,000. It does not apply to existing properties, regardless of price. This is an important distinction: a new house-and-land package at $720,000 qualifies; an existing terrace at $600,000 does not.
To qualify for the FHOG you must not have owned residential property anywhere in Australia or overseas, you must move in within 12 months of settlement, and you must live in the property for at least 6 continuous months. The grant is automatically applied through your lender or solicitor if you are eligible.
First Home Guarantee (federal)
The First Home Guarantee (formerly First Home Loan Deposit Scheme) is a federal government program that allows eligible first home buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance (LMI). The government guarantees up to 15% of the purchase price, making it equivalent to an 80% LVR loan for lender risk purposes.
LMI typically costs $10,000–$30,000 for a buyer with a 5–10% deposit at Sydney prices, so avoiding it is a material saving. However, the scheme has property price caps (in 2025-26, $900,000 for Sydney), limited places per financial year (35,000 nationally), and is only available through selected lenders.
The 5% deposit still needs to be genuine savings (not gifted funds in most cases). You will also still need to meet the lender's serviceability requirements for the full loan amount.
NSW Shared Equity Home Buyer Helper
The NSW Shared Equity Home Buyer Helper is a state government scheme aimed at key workers (teachers, nurses, police) and single parents. The government takes a co-ownership equity share of up to 40% of the purchase price for new homes or 30% for existing homes, in exchange for the buyer needing a smaller deposit and loan.
This scheme significantly reduces the purchase price you need to borrow and insure, making otherwise unaffordable suburbs accessible. However, when you sell, the government reclaims its equity share (plus appreciation). You can also buy out the government's share at any time if your financial position improves.
The scheme has income caps, property price caps, and eligibility requirements that limit it to specific buyer types. Check the NSW government website for current thresholds, as they are updated annually.
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