First Home Buyer Grants & Incentives

Owning a home in Sydney is a dream for many, but rising property prices and high upfront costs can make it challenging. Fortunately, there are several government grants and incentives that may help first-home buyers enter the property market with lower deposits, reduced stamp duty, and financial assistance.

If you’re a first home buyer in Sydney, you may be eligible for several government-backed programs, like the First Home Owner Grant (FHOG), stamp duty exemptions, and the Home Guarantee Scheme (HGS). Additionally, the Help to Buy program offers shared equity options, making homeownership more accessible.

In this guide, Unconditional Finance breaks down all the key grants and incentives available to first-home buyers in Sydney, explaining who qualifies, how to apply, and how these programs may reduce your costs.

Understanding First Home Buyer Grants and Incentives

Buying your first home isn’t just about saving for a deposit. Additional expenses like stamp duty, legal fees, and mortgage insurance can make the process expensive. This is where first-home buyer incentives may help.

Government grants and schemes may provide financial assistance by:

• Helping to reduce upfront costs with potential cash grants
• Offering stamp duty exemptions or concessions
• Allowing smaller deposits, potentially avoiding Lenders Mortgage Insurance (LMI)
• Providing government equity contributions that could lower mortgage repayments

The Australian and NSW governments have introduced several programs to support first-home buyers. Below, we’ll explore each option in detail.

1. The First Home Owner Grant (FHOG) in New South Wales

The First Home Owner Grant (FHOG) is a one-time payment that could help first-time buyers afford a newly built home or an off-the-plan property. However, it’s important to understand its limitations and how to maximise its benefits.

Key Details

Grant amount: $10,000

Eligible properties

• New homes valued up to $600,000 for an individual property purchase.
• For a house and land package, the total value must not exceed $750,000.
• The home must not have been lived in before, except in the case of substantial renovations.

Eligibility

• You (and any co-applicants) must be first-home buyers who have never owned property in Australia.
• Applicants are generally required to be Australian citizens or permanent residents.
• Most buyers are expected to live in the property as their main residence for at least 12 months, starting within a year of settlement or when construction is completed. 
• You cannot sell or lease the home within the required residency period.

How to Apply

1. Apply through your mortgage lender when finalising your home loan, or apply directly via Revenue NSW.
2. Provide supporting documents, including proof of identity, contract of sale, and evidence of eligibility.
3. Timing of the grant payment:
   • If you’re buying a new home, the grant is paid at settlement.
   • If you’re building, the grant is paid at key construction milestones.

Important Considerations & Limitations

1. The grant is available exclusively for newly built homes and does not apply to established properties.
2. You cannot use the grant for an investment property.
3. If the property value exceeds the specified threshold, you may not qualify for the grant.
4. If you move out before 12 months, you may be required to repay the grant.
5. In some cases, the grant may be combined with other incentives, such as stamp duty exemptions and First Home Buyer Assistance Scheme discounts.

2. Stamp Duty Exemptions and Concessions (First Home Buyer Assistance Scheme – FHBAS)

A major upfront cost when buying a home is stamp duty. However, first-home buyers in NSW can get an exemption or discount through the First Home Buyer Assistance Scheme (FHBAS).

How much can you save? 

• Full exemption: No stamp duty for properties up to $800,000.
• Discounted stamp duty: Reduced rates for properties valued between $800,000 and $1,000,000.
  • Example: For a $900,000 home, you could save over $20,000 in stamp duty.
• Land purchases: If you’re buying vacant land to build a home, the stamp duty exemption applies up to $350,000, with discounted rates up to $450,000.

Eligibility

• You must be a first-home buyer and an Australian citizen or permanent resident.
• You must live in the property for at least 12 months after settlement.
• The property must be used as your primary residence, NOT an investment.

How to Apply

1. Submit your application through Revenue NSW before or at settlement.
2. Your solicitor or conveyancer can apply on your behalf.
3. The exemption/concession is applied automatically at the time of settlement (meaning you won’t need to pay upfront and then claim a refund).

Important Considerations & Limitations

1. If your home is valued above $1,000,000, you may not be eligible for a stamp duty discount.
2. If you move out within 12 months, you could be required to repay the concession.
3. Not available for investment properties—it must be your primary home.

3. Home Guarantee Scheme (HGS) – Federal Government’s Key Homeownership Support

The Home Guarantee Scheme (HGS) is a federal initiative that may assist Australians in purchasing a home with a smaller deposit while potentially avoiding Lenders Mortgage Insurance (LMI).

Key Programs Under HGS

1. First Home Guarantee (FHBG) – For first-home buyers
2. Family Home Guarantee (FHG) – Support for single parents
3. Regional First Home Buyer Guarantee (RFHBG) – Encouraging regional homeownership
4. Help to Buy Scheme – Government shared equity model

Each program has different eligibility criteria, benefits, and limitations—let’s break them down.

3.1 First Home Guarantee (FHBG) – Helping First-Home Buyers with Deposits

Saving a 20% deposit is often the biggest challenge for Sydney home buyers. The First Home Guarantee (FHBG) allows eligible first-home buyers to purchase a home with as little as a 5% deposit while avoiding Lenders Mortgage Insurance (LMI), which could help reduce upfront costs.

Key Benefits

• Deposit requirement: As low as 5%.
• LMI Waiver: Saves buyers up to $30,000+ in upfront costs.
• Property Value Limits: Sydney homes must be valued up to $900,000 (varies by location).

Eligibility

• Must be a first-home buyer.
• Income limit: $125,000 per year (singles) or $200,000 (couples).
• Must live in the property as a primary residence—not for investors.

Important Considerations & Limitations

1. Limited slots available—only 35,000 places per year across Australia.
2. The loan is still a standard mortgage—this scheme does not provide financial assistance beyond the LMI waiver.
3. Buyers must meet standard lending criteria from participating banks/lenders.
4. Property value limits vary—in Sydney, you can purchase up to $900,000, but in regional NSW, the cap is lower.

3.2 Family Home Guarantee (FHG) – Support for Single Parents

The Family Home Guarantee (FHG) is aimed at assisting single parents in purchasing a home with as little as a 2% deposit while potentially avoiding Lenders Mortgage Insurance (LMI), which could improve accessibility to homeownership.

Key Benefits

• Deposit requirement: As low as 2%.
• No LMI costs: Saves thousands in upfront fees.
• Property price limit: Sydney homes up to $900,000 qualify.

Eligibility

• Single parents with at least one dependent child.
• Income limit: Must earn below $125,000 per year (excluding child support).
• It must be either a first-home buyer or a previous homeowner who no longer owns the property.
• Must live in the property—not for investment purposes.

Important Considerations & Limitations

1. Only 5,000 spots per year—high demand means slots fill up quickly.
2. Mortgage repayments may still be high, as a smaller deposit means a larger loan balance.
3. You remain responsible for the full loan repayment—the government only guarantees the deposit, they do not provide financial assistance.
4. You cannot own other property at the time of applying, but past homeownership is allowed. 

3.3 Regional First Home Buyer Guarantee (RFHBG) – Encouraging Regional Homeownership

If you’re open to living outside of Sydney, the Regional First Home Buyer Guarantee (RFHBG) may allow you to buy a home in regional NSW with just a 5% deposit and no Lenders Mortgage Insurance (LMI).

Key Benefits

• Deposit requirement: 5% (instead of 20%).
• LMI waiver: Saves thousands in upfront mortgage insurance.
• Property price limit: In regional NSW, properties must be valued under $750,000.
• More affordable home prices compared to Sydney’s high cost of living.

Eligibility

• Must be a first-home buyer.
• Must have lived in a regional location for at least 12 months before applying.
• Income limit: $125,000 per year (singles) or $200,000 (couples).
• Must live in the purchased home as a primary residence.

Important Considerations & Limitations

1. Only 10,000 spots per year—and demand is growing as regional areas become more desirable.
2. Strict residency requirement: You must have lived in regional NSW for at least 12 months before applying.
3. Fewer property options in smaller towns, which may limit availability.
4. Transport and infrastructure differences—living in regional areas means you may need to commute for work.

3.4 Help to Buy Program – Government Co-Ownership for First-Home Buyers

The Help to Buy program is a shared equity scheme where the government contributes up to 40% of a new home or 30% of an existing home, reducing your mortgage size and deposit requirements. This program may make homeownership more accessible for buyers who find it challenging to save for a large deposit or qualify for a traditional home loan.

How Does It Work?

1. The government purchases a share of your home, meaning you co-own the property with them.
2. You may take out a smaller mortgage, as the government’s contribution could reduce the amount you need to borrow.
3. You can gradually buy back the government’s share over time if you choose.
4. No rent is charged on the government’s share, which may make this a more affordable pathway to homeownership.

Key Details

Government Contribution

• Up to 40% of the home price for a new build.
• Up to 30% of the home price for an existing property.

Deposit Requirement: As low as 2% of the purchase price.

Income Caps

• Singles: Up to $90,000 per year.
• Couples: Up to $120,000 per year.

Property Value Limits: Varies by location (Sydney has a higher price cap than regional areas).

Important Considerations & Limitations

1. You do NOT fully own the home until you buy back the government’s share.
2. If your income exceeds the cap for two consecutive years, you may be required to start repurchasing the government’s portion.
3. You may be limited in how you renovate or modify the property, since the government owns a share.
4. If you sell, you must repay the government’s share based on the current market value—which could be higher than what they initially contributed.
5. Spots are limited, and demand is expected to be high.

4. First Home Super Saver Scheme (FHSS) – Using Superannuation for a Deposit

Saving for a home deposit can take time, but the First Home Super Saver (FHSS) scheme lets first-home buyers withdraw up to $50,000 from their superannuation to help boost their deposit faster. This may offer tax benefits compared to saving in a regular bank account.

Key Benefits

• Withdraw up to $50,000 in voluntary super contributions ($15,000 max per financial year).
• Super contributions are taxed at a lower rate (15%), which could help you save more efficiently. 
• Reduces the time needed to save for a deposit, especially for those with extra super savings.

How Does It Work?

1. Make voluntary contributions to your super fund before purchasing a home.
2. Apply through the ATO to withdraw these contributions plus any earnings.
3. Use the withdrawn funds as part of your home deposit.

Eligibility

• You must be a first-home buyer.
• You must live in the property for at least 12 months after purchase.
• Contributions must be voluntary (employer super contributions do not count).

Important Considerations & Limitations

1. You cannot withdraw your entire super balance—only voluntary contributions made under the scheme.
2. Superannuation is an investment for retirement, so withdrawing funds early could impact your long-term savings.
3. You must apply to the ATO before signing a property contract, or you might lose access to your FHSS savings.
4. The maximum withdrawal is $50,000—which may not be enough for a full deposit in Sydney, where home prices are high.

Additional First-Home Buyer Support and Low-Interest Loan Programs

Beyond government grants and incentives, some banks and lenders offer exclusive benefits for first-home buyers, helping to further reduce borrowing costs.

Types of Additional Support

• Cashback incentives – Some lenders offer cash bonuses ($2,000–$5,000) when you take out a mortgage with them.
• Discounted interest rates – Special low-interest home loans are available for first-home buyers or low-deposit borrowers.
• No or reduced Lenders Mortgage Insurance (LMI) – Some banks waive or discount LMI for first-home buyers, even outside the First Home Guarantee Scheme.
• Offset accounts and redraw facilities – Some lenders provide flexible repayment options to help reduce mortgage interest.

How to Access These Benefits

1. Compare home loans from different lenders—banks, credit unions, and online lenders often have different offers.
2. Work with a Sydney mortgage broker who can find special deals that are not always advertised.
3. Read the fine print—some cashback offers require long-term commitments or come with higher rates.

Important Considerations & Limitations

1. Cashback offers may seem attractive, but check the interest rate—a slightly higher rate can cancel out the benefit.
2. Some lenders only offer special deals to customers with stable full-time employment—if you’re self-employed or on a casual contract, approval may be harder.
3. Low-interest introductory rates may increase later, so check what the ongoing rate will be.

Strategic Tips for Maximising First-Home Buyer Grants and Incentives

Navigating multiple first-home buyer schemes can be confusing, but with the right strategy, you can combine benefits and save even more. To maximise your savings, consider the following below:

✔ Combine multiple grants and incentives

• To increase savings, consider combining the First Home Guarantee, stamp duty concessions, and the First Home Owner Grant (FHOG), if eligible.
• If eligible, combine the Help to Buy program with stamp duty exemptions.

✔ Time your purchase to maximise savings

• Some state incentives have cut-off dates, so plan ahead to apply before deadlines.
• Avoid purchasing just above grant eligibility price caps, as staying within the limit may result in significant savings

✔ Plan for additional home-buying costs

• Even with grants, budget for legal fees, inspections, moving costs, and insurance.
• First-home buyers often forget about loan establishment fees and ongoing property costs.

✔ Engage a mortgage broker

• Brokers can compare multiple lenders and help find lower interest rates.
• Many brokers do not charge fees to borrowers—they are paid by lenders.

✔ Understand the residency requirements

• Most grants require you to live in the home for at least 12 months—if you move out early, you may have to repay the grant.

Common Mistakes to Avoid When Applying for First-Home Buyer Grants

Even with great incentives available, many first-home buyers unknowingly make mistakes that cost them thousands. Below are the top mistakes to avoid:

🚫 Not checking eligibility before applying

• Many buyers assume they qualify but later find out they don’t meet income, residency, or property price limits.
• Always check grant requirements before making an offer on a home.

🚫 Missing deadlines for applications

• Some grants must be applied for before settlement, while others allow applications after purchase.
• Failing to apply on time could result in missing out on available incentives.

🚫 Buying a property above the price cap

• If the grant’s property price limit is $900,000 and you buy a home for $910,000, you get nothing—even if you’re just slightly over the cap.

🚫 Not factoring in additional home-buying costs

• Stamp duty savings help, but legal fees, loan application fees, inspections, and moving costs can still add up.
• First-home buyers often underestimate how much they need beyond the deposit.

🚫 Signing a contract before securing grant approval

• Some grants require pre-approval before purchasing—if you sign too early, you could miss out.

🚫 Not considering loan terms beyond the deposit

• A low-deposit loan may seem attractive, but if it has a higher interest rate, it could lead to higher overall costs in the long run.

Making the Most of Sydney’s First-Home Buyer Incentives

First-home buyer grants and incentives could help reduce costs and improve accessibility to homeownership. Whether you’re using the First Home Owner Grant, avoiding stamp duty, or benefiting from the Home Guarantee Scheme, planning ahead and understanding your options can put you in a stronger financial position.

Before making a purchase, consider speaking to a mortgage broker or financial expert to explore all available opportunities. With the right support, purchasing your first home in Sydney may become more achievable.

If you’d like expert guidance tailored to your financial situation, reach out to us today—we’re here to help make your first home purchase as smooth and affordable as possible.