Thinking of taking out a home loan to purchase property in New South Wales? Here’s what you need to know to be a savvy mortgage holder and property owner.
Given that the rules and regulations of property ownership are governed at state level, it’s tricky to know precisely what applies to you. When it comes to the first home owner grant (FHOG), stamp duty and property ownership, find out exactly what you need to know if your property is based in New South Wales (NSW).
If you’re a first home buyer, you may be entitled to one of the NSW government's first home buyer grants or concessions, and you may need to understand how property and land ownership is managed in your state.
We’ve broken it down to a state level (as it should be), to help you quickly identify the information that applies to you.
Under the FHOG in NSW, there are several schemes which have been developed to help first home buyers get into the property market sooner: The First Home-New Home Scheme, the First Home Owner Grant (New Homes) Scheme, and the New Home Grant Scheme.
First Home - New Home Scheme
The First Home - New Home Scheme commenced from 1 January 2012. The scheme offers eligible buyers exemptions or concessions on transfer duty. This includes an exemption from stamp duty for new homes valued up to $500,000 and concessions on duty for new homes valued between $500,000 and $600,000.
If you want to estimate the duty concession on a new home valued between $500,000 and $600,000, take the purchase price and multiply it by 0.2249 and then subtract $112,450.
The First Home-New Home Scheme also provides a duty exemption on vacant land valued between $350,000 and $450,000.
To calculate the concession on vacant land, take the purchase price and multiply it by 0.1049 and then subtract $31,470.
First Home Owner Grant (New Homes) Scheme
The NSW First Home Owner Grant (New Homes) scheme provides a grant to eligible first home owners to help them buy a new home or to assist them with building a new home.
For eligible transactions made on or after 1 January 2016, the grant is $10,000.
For eligible transactions made between 1 October 2012 and 31 December 2015, the grant offered was $15,000.
To find out if you’re eligible for the FHOG, please check out our complete FHOG guide.Back to top
New Home Grant Scheme
The NSW New Home Grant Scheme was introduced on 1 July 2012 to encourage eligible purchasers to construct new homes. It provides a $5,000 grant for the purchase of a new home, an off-the-plan home or vacant land on which a new home is constructed.
The terms of the New Home Grant scheme depend on whether you entered into the agreement on or before 30 June 2014 or on or after 1 July, 2014.
The New Home Grant Scheme is not compatible with the First Home Owner Grant (New Homes) Scheme.Back to top
If you own property in NSW, it’s worth understanding how stamp duty works.
The NSW State Office of Revenue states that transfer of land is a duty in NSW on the following transactions:
- A sale or transfer of land
- A sale or transfer of business assets
- A declaration of trust over dutiable property
Stamp duty is calculated on the total dutiable value of the property and generally the purchaser of the property or the transferee is liable to pay the duty.Back to top
NSW property and land ownership
If you own property in NSW, you can access the ownership records governed by Land and Property Information (LPI) under the Torrens title system.Back to top
How to add a partner's name to the title
If you’d like to include your partner’s name on the title or transfer property ownership, you should notify your lender before you complete any paperwork. Your lender can lodge the documents and the Certificate of Title on your behalf after you have completed the Transfer Form and had it approved by the State Office of Revenue (OSR).
Once you’ve obtained approval from your lender, you’ll need to access and complete a transfer form from the LPI website under "Land title dealing forms".
You’ll then need to complete and submit a Notice of Sale (NOS) form and access your Certificate of Title.
For more information about how to include a partner’s name on your property title, view our NSW property and land ownership article.Back to top
When you purchase residential property in NSW, there's a critical stage that happens after the exchange of contracts which is known as the cooling-off period.
In NSW, the cooling-off period is five business days. During this time, you can get out of the contract as long as you provide written notice to the vendor. If you decide to cancel the contract during the cooling off period, you will incur a 0.25% penalty of the sale price of the property. For example, if the property sells at $500,000, you would forfeit $1,250 (which would be paid to the seller).
If you want to back out of the contract after the cooling-off period has expired, it could be expensive. Your contract will include details about the penalties imposed if you decide to do this. You may need to pay default penalties and compensate the seller for any losses they have encountered as a result of your actions.Back to top
If you need help comparing home loans, find a local mortgage broker near you to discuss your borrowing options. A licensed broker has expert knowledge of the home loan industry and can recommend home loans that are suitable to you. They can draw upon their panel of lenders to find one that’s likely to review your application and they can even negotiate for a better deal on your behalf.
Remember that brokers generally offer their services free of charge so it’s worth speaking to one to help find a home loan that’s right for you.
Local area/mortgage broker guides
We've written a number of guides which lists the local brokers as well as information about an area. You can read them below:
Rates last updated February 20th, 2017.
- NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier)
Interest rate increases by 0.23%
January 16th, 2017
- CUA Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier)
Comparative rate increases by 0.03% | Interest rate increases by 0.15%
January 19th, 2017
- IMB Accelerator Home Loan - LVR <=80% $300k+ (Owner Occupier)
Interest rate increased by 0.10%
January 30th, 2017