Q: THE HOUSE I WISH TO PURCHASE IS TENANTED BUT I AM A FIRST HOME BUYER

A: To qualify for the first home owners grant at the time of writing, the purchaser must satisfy residency requirements. At this point in time, the purchaser is require to living in the property for 26 continuous weeks commencing within the first 12 months of ownership. 

If the tenant is still present at settlement, you will still be eligible for your grants and stamp duty exemption as long as the tenant vacates reasonably soon and you can commence your initial 26 weeks. 

It would be wise to check the tenant's lease prior to exchange of contracts to ensure you will have the right to evict them in time to commence your residency requirements. 

As the eligibility criteria are constantly changing, it would be a good idea to check with the Office of State Revenue about your exact circumstances prior to exchange of contracts. 

Q: HOW MUCH CAN I SPEND ON MY HOUSE TO QUALIFY FOR A STAMP DUTY EXEMPTION?

A: The Office of State Revenue provides a stamp duty exemption for houses priced up to $500,000.00. 

There is a sliding scale for houses priced between $500,000.00 and $600,000.00. For example, a house that costs $500,001.00 will attract a duty of just $10.00, whereas a house which costs $599,999.00 is liable for over $22,000 in duty, with an exemption of just a few cents. 

To calculate the amount of duty you will have to pay, use the Office of State Revenue's First Home Plus calculator. 

Q: WHEN WILL THE FIRST HOME OWNERS GRANT END?

A: At this stage, the Federal Government has indicated its intention to cut the First Home Owners Grant back to previous levels in the Budget. This would mean the grant returns to $7,000.00 for existing homes. 

Presuming the New South Wales State Government continues with the stamp duty exemption, this is still quite a good boost. Most first home buyers, however, have to pay Mortgage Insurance on their loan - which can quickly eat up all if not more than the amount of the grant. 

This can mean that the cost of getting into your first home is still quite high, which is why the increased grant has been so successful. 

Thanks for your question Lucy. You might like to bookmark this page and check back again as we will definitely be posting more information as it comes to hand.  

WHEN DO THE CHANGES TO THE FIRST HOME OWNERS GRANT KICK IN?

A: Hi Chris, that's a great question - in short, we have spent the whole week trying to find out as well. Apparently the Office of State Revenue, who manage the applications at a state-level, are also waiting to discover the answer to this question, as is the Australian Institute of Conveyancers.

We are contacted daily by real estate agents, clients and others within the industry who insist that they, or someone they know, has received a definitive response.

What we can say with certainty is that the Office of State Revenue have promised to announce any further details they receive on their web site, at this link:

Office of State Revenue - First Home Owners Grant updates

PLEASE REMEMBER THIS ADVICE APPLIES TO NEW SOUTH WALES RESIDENTIAL PROPERTY ONLY. TO CONFIRM YOUR PARTICULAR CIRCUMSTANCES, PLEASE CONTACT LIBERTY CONVEYANCING.

Q: WHAT DO I DO WHEN I'VE FOUND A HOUSE I LIKE?

A: The first steps for first home buyers are always bewlindering. There is an overwhelming amount of information to absorb, and we are glad to see that questions as to the first few steps are being raised here.

We recommend that the first step you take is a visit to your lender. The amount of money you can borrow will dictate the area in which you can purchase, and the price bracket within which to commence your search. The lender should also be able to process a pre-approval for you, which will confirm that you are in a position to take out a loand for the next few months. It can be quite a lengthy process, so we would recommend that you tackle this step as early in the process as possible.

Once the pre-approval is in place, it's time to start searching for a property. Do your homework and search thoroughly for the house that best suits your needs, and make an offer based on recent sales data. You can check recent sales data by purchasing property magazines, or by checking sites such a RP Data, which can give you some basic information for free. Other more detailed information is avaiable for a fee.

Make an appointment to visit the property, and make an offer to the real estate agent, as to how much you would like to pay for the property. The agent is required by NSW Law to relay your offer to the owner. Once the owner and yourself have agreed to a price, you will need to appoint a conveyancer to undertake your legal work.

You will need to book pre-purchase inspections at this stage, which your conveyancer should be able to help with.

The steps outlined here will vary slightly if you are purchasing at an auction or purchasing with a cooling off period.

Please remember this advice applies to New South Wales Residential property only. To confirm your particular circumstances, please contact Liberty Conveyancing

Q: WHO APPLIES FOR THE FIRST HOME OWNERS GRANT?

A: Generally speaking, the lender applies for the First Home Owners Grant ($7,000.00). It is paid by the Federal Government at settlement.
And generally speaking once again, your legal representative applies for the Stamp Duty Exemption on the Contract and on the Mortgage.
If you are not obtaining a mortgage, then you or your legal representative can apply for the $7,000.00 grant to be paid a few weeks after settlement.


Please remember this advice applies to New South Wales Residential property only. To confirm your particular circumstances, please contact Liberty Conveyancing