The exemption and concessional rate thresholds for transfer duty have been temporarily increased for first home buyers who enter into a contract to buy a new home or vacant land (on which to build a new home) between 1 August 2020 and 31 July 2021.
First home buyers – buying a new home
If you buy a new home valued up to $800,000, you will be eligible for a full exemption from transfer duty.
If you buy a new home valued between $800,000 and $1 million, you will be eligible for a concessional/reduced rate of transfer duty (based on the value of the new home).
A “new home” is considered to be a home that has not previously been occupied or sold as a place of residence and includes a substantially renovated home and a home built to replace a demolished property.
The temporary increased thresholds do not apply to first home buyers of existing homes (the previous thresholds continue to apply).
First home buyers – buying vacant land (on which to build a new home)
If you buy vacant land valued up to $400,000, you will be eligible for a full exemption from transfer duty.
If you buy vacant land valued between $400,000 and $500,000, you will be eligible for a concessional/reduced rate of transfer duty (based on the value of the vacant land).
What are the eligibility conditions?
To be eligible for a transfer duty exemption/concessional rate (before or after 1 August 2020):
you must be an individual (not a company or trust);
you, and your spouse or partner, must never have owned or co-owned residential property in Australia;
you, and your spouse or partner, must never have received an exemption or concession under the scheme previously;
you or one of the first home buyers must be an Australian citizen or a permanent resident; and
you or one of the other first home buyers must move into the new home within 12 months after buying the property and live there for at least 6 continuous months.
Even if you buy a new home or vacant land with other persons (other than your spouse) who are not eligible, you are still eligible if you (and any other eligible purchasers) buy at least a 50% interest in the property.
Do you have to apply for the exemption/concessional rate?
Yes, you must apply to Revenue NSW for an exemption/concessional rate. The application can be lodged after contracts have been exchanged.
Can you also be eligible for the first home owner’s grant?
Yes, you may also be eligible for the $10,000 grant under the first home owner’s grant (new homes) scheme if you satisfy the requirements of that scheme.