First Home Buyers Scheme: What’s the Catch?

Buying your first home is exciting. Between saving a deposit, obtaining finance approval and finding the right property, government assistance can make entering the property market feel more achievable.

In NSW, eligible first home buyers may receive a full exemption or concessional rate of stamp duty, also known as transfer duty, under the First Home Buyers Assistance Scheme (FHBAS).

The potential savings can be significant. However, the scheme has eligibility requirements, property-value thresholds and ongoing obligations.

So, what’s the catch?

1. The property must fall within the price thresholds

Perhaps the most obvious limitation is that not every property qualifies.

For eligible contracts exchanged on or after 1 July 2023:

• A new or existing home in NSW valued at $800,000 or less may qualify for a full transfer duty exemption.
• A new or existing home valued at more than $800,000 but less than $1 million may qualify for a concessional rate.
• Vacant land valued at $350,000 or less may qualify for a full exemption.
• Vacant land valued at more than $350,000 but less than $450,000 may qualify for a concessional rate.

The applicable threshold is based on the dutiable value of the property and the relevant date of the transaction.

If your dream home is valued at or above the upper threshold, you should not assume that a first home buyer concession will apply.

2. You must satisfy the general eligibility requirements

Being a first home buyer is only one part of the eligibility test.

Generally:

• the purchase must involve a new or existing home, or vacant land, in NSW;
• the transfer must be for the whole property;
• each eligible purchaser must be an individual rather than a company or trust;
• each eligible purchaser must generally be at least 18 years old;
• neither the purchaser nor their spouse or de facto partner can have previously owned or co-owned residential property in Australia;
• neither the purchaser nor their spouse or de facto partner can have previously received an exemption or concession under the scheme; and
• at least one eligible first home buyer must be an Australian citizen or permanent resident.

Revenue NSW may waive some requirements, including the age requirement and the restriction on purchasing through a trust, in limited circumstances.

Eligibility should therefore be assessed against the purchaser’s complete circumstances rather than simply asking whether they have bought a home before.

3. Your spouse or de facto partner’s history matters

Imagine that you have never owned a home, but your spouse or de facto partner owned an apartment five years ago.

You find a property you love and assume that because you are personally a first home buyer, you will receive the benefit.

Unfortunately, it is not that simple.

For FHBAS purposes, your spouse or de facto partner’s previous ownership of residential property in Australia can affect your eligibility—even if they will not be named as a purchaser or registered on the title.

The same applies if your spouse or de facto partner previously received an exemption or concession under the scheme.

For the scheme, a spouse generally includes someone to whom you are legally married or with whom you are living in a de facto relationship.

If you are legally married but separated, you may not be treated as having a spouse if you are no longer living together and have no intention of resuming cohabitation.

4. You cannot simply buy the property and immediately rent it out

The FHBAS is intended to help eligible purchasers buy a home in which they will live.

For contracts exchanged on or after 1 July 2023, at least one eligible first home buyer must generally:

• move into the property within 12 months after settlement; and
• occupy it as their principal place of residence for at least 12 continuous months.

This means that you should not purchase a property on the assumption that you can immediately use it as an investment property.

If your circumstances change and the residence requirement cannot be satisfied, you must notify Revenue NSW. You may lose the benefit and become liable to pay the applicable transfer duty, together with possible interest and penalties.

Revenue NSW may modify or waive the residence requirement in special circumstances. Certain permanent members of the Australian Defence Force may also be exempt from the requirement if the applicable conditions are satisfied.

The key point is that receiving the exemption or concession is not necessarily the end of the story. Relevant obligations continue after settlement.

5. Buying with someone else can become complicated

What happens if you buy with a friend, sibling, parent or other person who is not an eligible first home buyer?

You may still be able to receive assistance under a shared-equity arrangement if the eligible first home buyer or buyers acquire at least a 50% interest in the property.

However, the ineligible purchaser must generally pay transfer duty on the share of the property they acquire.

Importantly, this shared-equity arrangement does not apply where the ineligible purchaser is the eligible buyer’s spouse.

In other words, who is named as a purchaser and who will be registered on the title matters.

This is particularly important when parents or other family members are helping a first home buyer purchase a property. Adding another person to the title may affect eligibility and create additional transfer duty consequences.

Legal advice should be obtained before deciding how the ownership will be structured.

6. Off-the-plan purchasers need to understand the timing

Eligible purchasers of certain off-the-plan homes may be entitled to defer the transfer duty liability date.

For an eligible off-the-plan purchase, the liability date may be deferred until the earlier of:

• completion of the agreement;
• assignment of the whole or any part of the purchaser’s interest; or
• 12 months after the contract date.

Where transfer duty remains payable, the ordinary payment period and the off-the-plan deferral operate together. Depending on the circumstances, the payment deadline may be up to 15 months after the contract was signed.

The deferral is not generally available for a contract involving vacant land alone.

If you are buying off the plan, do not assume that a settlement date several years away means that your transfer duty obligations will also be postponed for several years.

Off-the-plan contracts can also involve additional risks, including:

• construction delays;
• changes to the development;
• variations to the size or layout of the property;
• sunset clauses;
• defects;
• changes in lending conditions; and
• valuation shortfalls before settlement.

The contract and the purchaser’s transfer duty position should be carefully reviewed before exchange.

So, what’s the catch?

There is not necessarily a “catch” in the traditional sense. The NSW First Home Buyers Assistance Scheme can provide a significant saving for eligible purchasers.

The difficulty is that being a first home buyer does not automatically mean that you will pay no transfer duty.

Eligibility may depend on:

• the type and value of the property;
• the date of the transaction;
• your age and residency status;
• whether you have previously owned residential property;
• whether your spouse or de facto partner has previously owned residential property;
• whether you or your spouse previously received a benefit under the scheme;
• who you are buying with;
• how ownership will be structured;
• whether you acquire the whole property;
• whether you live in the property for the required period; and
• whether the purchase is an eligible off-the-plan transaction.

Once contracts have been exchanged, your ability to restructure the transaction or address an unexpected eligibility issue may be limited.

How Lawgix can help

Buying your first home is a significant financial and legal commitment.

At Lawgix, we can:

• review and explain your contract;
• advise you about your potential eligibility for a first home buyer transfer duty exemption or concession;
• identify contractual, title and property-related risks;
• explain your obligations before you exchange contracts; and
• manage the conveyancing process through to settlement.

If you are buying your first home in NSW, contact Lawgix before exchanging contracts so that you understand your rights, obligations and likely purchase costs—and can avoid costly surprises.

This article provides general information only and does not constitute legal advice. Eligibility for the NSW First Home Buyers Assistance Scheme depends on each purchaser’s individual circumstances, the property being purchased and the legislation and Revenue NSW requirements applying at the relevant time. The information in this article is current as at 31 August 2026.