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First Home Owners Grant New South Wales
Posted August 3rd, 2010
and last modified May 26th, 2011
Housing prices in New South Wales are among the highest in the country, so you’ll have to save hard and long to get together the deposit for your first home. The good news is that you may be eligible for some government money that will boost your savings.
First Home Owners Grants
Australians buying their first home may be eligible for grants and concessions under federal and state-based schemes that have been designed to help Australians take the first step on the property ladder.
- The Australian federal government introduced the First Home Owners Grant scheme in 2000 to assist first home buyers who had been disadvantaged by rising house prices as a result of the Goods and Services tax. The scheme provides a one-off tax-free grant of $7,000 to first home buyers who satisfy a number of eligibility criteria relating to Australian residency, previous home ownership and intention to use the property as a primary place of residence.
- The New South Wales Office of State Revenue administers the First Home owners Grant in NSW. A New Home Buyers Supplement of $3000 is available and first homebuyers may also qualify for concessions on state stamp duty. First home buyers who buy properties valued at more than $750,000 do not qualify for either the federal First Home Owners Grant or the state New Home Buyers Supplement.
Buying your first home
Many people in New South Wales have bought their first homes with help from the First Home Owners Grant and the New Home Buyers Supplement Let’s consider the funds you are likely to need to borrow for your new home – and pay back over the next few years.
- Loans for first-time home buyers. Ideally, you’ll have a deposit of about 5-10% of the property value and the remaining 90-95% of the property’s value will come from a home loan or mortgage. (Remember that most lenders will want to see evidence of genuine savings over an extended period so if you’re thinking of using the grant or supplement as part of your deposit, it’s unlikely that you will be able to use the grant as 100% of your deposit.) The maximum amount of loan available to you, provided your income, savings history and credit record are satisfactory, would be one with monthly repayments about one third of your monthly disposable income. As an indication, if your disposable income was assessed as $6,000 you might be offered a loan with monthly repayments of $2,000; at 7% interest that could mean borrowing of $275,000 over 25 years or $300,000 over 30 years.
- Am I ready to buy my first home? When you know how much you can borrow,you can now consider the kind of property you could buy. If the amount you can borrow is sufficient to buy the kind of property you want, it’s important to think seriously about how comfortable you are about the commitment to repay a loan for the next 25 or 30 years. If mortgage repayments and the other costs of owning a home would make it hard for you to live in the style you’re used to, are you willing to sacrifice some of your discretionary spending for mortgage repayments? And if at present you can’t borrow enough to buy the kind of property you were hoping for, you have two options: lower your expectations and buy a property you can afford now, or wait a while until your savings and income have increased to a point where you can afford to buy the kind of property you’re aspiring to own.
If you’d like to know more about First Home Owners Grants, the Home Buyers Supplement or loans for first home buyers, please contact us.
Related posts:
- Federal Government First Home Owners Grant
- First Home Buyers Grant New South Wales (NSW)
- First Home Owners Grant FAQ
- Eligibility for first home buyers grant
- First Home Owners Grant Eligibility requirements NSW
- How to Apply for the First Home Owners Grant in South Australia (SA)
- First Home Owners Grant (WA)
- Can I Apply for the First Home Owners Grant if I Have Previously Owned a Property Which Was Then Sold?
- First Home Owners Grant (ACT)
- First Home Owners Grant FAQ NSW
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