Property Assistance For First Home Buyers in 2023

The new Labor government has and will continue to introduce policies and schemes that assist Australian’s to purchase their first property. Many incentives favour new housing developments, which is good news for property developers in Australia, residential property developers and property consumers looking to enter the market (especially for the first time).

With so much discussion around the first home buyer benefits likely to be introduced in 2023, we thought we would explore the many benefits for property developers and property consumers alike, including all those being offered at both a national level and state level.

National Incentives

Proposed incentives under The Federal Labor government led by Anthony Albanese include:

‘Help To Buy’ Scheme

The Labor government is making it easier than ever for 10,000 applicants per year to buy their first home. Under the scheme, buyers will only require at least 2% of the purchase price saved in order to borrow up to 40% of the purchase price of a new home and up to 30% for an existing home.

First home buyers are saving thousands of dollars by not having to save and pay for Lender’s Mortgage Insurance (LMI) when purchasing real estate in Sydney. Borrowing against your pre-approved purchase price means no more worrying about whether or not there’s enough money set aside. This makes property development an even more attractive option for new home buyers as they receive an extra 10% borrowing assistance, which is a great incentive.

You can read more about the ‘Help To Buy’ Scheme in our previous article.

First Home Loan Deposit Scheme

The First Home Guarantee (FHBG) is an Australian Federal Government incentive that is a part of the Home Guarantee Scheme, aimed at supporting eligible first home buyers to purchase a home sooner.  The scheme is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government who guarantees home loans (up to a maximum of 15% of the value of the property) from participating lenders making it possible for first home buyers to purchase home with as little as 5% deposit without paying Lender Mortgage Insurance (LMI).

Under the FHBG, 35,000 places are available to eligible first home buyers from 1 July 2022 – 30 June 2023.  

To be eligible to apply for the FHBG, applicants must be: 

• applying as an individual or couple (married / de facto) 
• an Australian citizen(s) at the time they enter the loan 
• at least 18 years of age 
• earning up to $125,000 for individuals or $200,000 for couples, as shown on the Notice of Assessment (issued by the Australian Taxation Office) 
• intending to be owner-occupiers of the purchased property 
• first home buyers who have not previously owned, or had an interest in, a property in Australia 

Under the FHBG, a property must be a ‘residential property’ to be considered eligible. Eligible residential properties include:   

• an existing house, townhouse or apartment  
• a house and land package  
• land and a separate contract to build a home  
• an off-the-plan apartment or townhouse   

The 2021-22 Federal Budget announced an extra 10,000 places are to be made available in the scheme from 1 July 2021 to 30 June 2022.

Family Home Guarantee

The Family Home Guarantee (FHG), not to be confused with the above FHBG, is also a part of the Home Guarantee Scheme. The NHFIC guarantees the mortgage with participating lenders (up to a maximum of 18% of the value of the property) enabling an eligible buyer to purchase a home with a 2% deposit without paying Lenders Mortgage Insurance. 

From 1 July 2022 to 30 June 2025, 5,000 places are available each financial year to eligible single parents with dependents. 

To be eligible to apply for the FHG applicants must:    

• be single. A person is considered single if they don’t have a spouse and/or a de facto partner. Note: a person who is separated but not divorced is not considered single.  
• have at least one dependent child. To have a dependent child, you must be the natural or adoptive parent of the child and the child must either be  
• a “dependent child” within the meaning of subsections (2), (3), (4), (5), (6) and (7) of section 5 of the Social Security Act 1991 or  
• at least 16 but under 22 years of age, receive a disability support pension within the meaning of the Social Security Act 1991 and live with you.   

Family Home Guarantee applicants can be either first home buyers or previous owners who do not currently own a home. 

To be eligible, you must not currently have: 

• a freehold interest in real property in Australia 
• a lease of land in Australia 
• a company title interest in land in Australia

Under the FHG, the property your purchase must be a ‘residential property’ to be considered eligible. Eligible residential properties include:   

• an existing house, townhouse or apartment  
• a house and land package  
• land and a separate contract to build a home  
• an off-the-plan apartment or townhouse

Regional First Home Buyer Support Scheme

The Regional First Home Buyer Support Scheme will support 10,000 first home buyers a year in regional Australia to purchase their first home. This incentive is estimated to increase the number of people in regional areas who can access a government guarantee scheme by 300%.

The government will guarantee up to 15% of the property value under Labor’s Regional First Home Buyer Support Scheme, which means regional Australians with a 5% deposit can avoid paying mortgage insurance – saving up to $32,000. 

Eligibility of the scheme includes:

• Live outside a capital city
• Be a first home buyer who is an Australian citizen over 18
• Live in the house purchased
• Have a taxable income of up to $125,000 per year for singles and $200,000 a year for couples
• Have been living in the region for at least 12 months
• Meet the property price thresholds for the region under the existing First Home Loan Deposit Scheme
• Existing houses, townhouses and units will be part of the scheme. Along with house and land packages, off-the-plan apartments and land with a contract to build

Labor’s First Home Buyer Support Scheme will start in January 2023 and cost $12.1 million by the end of 2024-25.

First Home Owner Grant

States and territories fund this despite being a federal government incentive and therefore have their own specific eligibility criteria. Please see the NSW breakdown below.

New South Wales Incentives

Proposed incentives under The NSW Liberal government led by Dominic Perrottet include:

First Home Owner Grant

A $10,000 First Home Owner Grant (FHOG) is available to those 18 years and over when you buy or build your first new home. Your first new home can be a house, townhouse, apartment, unit or similar that is newly built, purchased off the plan or substantially renovated.

For new properties (and the substantially renovated) the value must not exceed $600,000. For land that you plan to build on, the total (land and build) must not exceed $750,000.

First Home Buyer Assistance Scheme

First-time buyers of existing homes will pay no transfer (stamp) duty on property worth less than $650,000. If an existing home is valued between $650,000 and $800,000, you can apply for a concession transfer duty rate, which will be based on the value of your home.

For new homes, you can apply for a full exemption to pay no transfer duty on new homes worth less than $800,000. If your new home is valued between $800,000 and $1 million, you can apply for a concession transfer duty rate, which will vary based on the value of your home.

You won’t pay transfer duty on vacant land worth less than $400,000, and a concessional rate on land up to $500,000.

New First Home Buyer Incentives in NSW 2023

First Home Buyer Choice

The NSW Government’s 2022-2023 state budget introduced a new property tax reform that will transform the process of buying your first home by introducing the option to elect to pay either an annual property tax or traditional stamp duty.

The annual tax would be $400 plus 0.3% of the property’s land value for owner occupiers, or $1,500 plus 1.1% of land value for investors. This incentive will be available for homes worth up to $1.5 million for first-home buyers.

The NSW Government intends to introduce the legislation in the second half of 2022, with eligible first-home buyers able to opt to pay land tax from 16 January 2023. The good news for those who have purchased their first property between the passage of the legislation and 15 January 2023 is that they may be able to get a refund on stamp duty paid if they choose to opt into the property tax.

What Does This Mean for Apartments?

This new incentive is particularly significant for apartments as it means that the additional 0.3% of the property land value charged as a part of the property tax will be split across all the apartments in the building.

For example, if you purchase an apartment within a building of 20 apartments, you will only be paying one twentieth of the land tax.

Shared Equity Scheme

The shared equity scheme will run as a trial with a two-year pilot from January 2023. It’s open to first home buyers who are nurses, teachers or police, single people aged 50 plus and single parents with a child or children under the age of 18.  

Under the scheme, the NSW government would contribute an equity share of up to 40% for a new home, or up to 30% for an existing home. You will be saving thousands of dollars in upfront costs.

What Could This Mean for First Home Buyers?

With all these new government incentives and the option to opt out of paying stamp duty, this will reduce the upfront costs for first home buyers across New South Wales making buying Sydney real estate easier. Research indicates that with stamp duty removed, simply saving $200 a week for a 10% deposit on real estate in Sydney could shave five years off the time taken to save.

If you’re considering buying real estate in Sydney or property in NSW, HYG has residential property developments that are perfect for first home owners that will truy elevate their lives. All of our new housing developments in Sydney are built with our signature designs that evolve quality, with a strong focus on high functionality and the finest fixtures and fittings. Find out more about residential property developers in Australia for your first property development and investment needs.