The RBA raised rates again yesterday — to 4.85%, the highest cash rate since 2008. If you’re a first home buyer in Sydney right now, that headline probably stings. But here’s the thing most buyers miss: the NSW government has quietly kept its stamp duty exemptions and grants on the table, and if you know how to stack them properly, you can walk into your first home saving upwards of $40,000 in upfront costs.
That’s not a small thing. For a lot of Sydney buyers, that saving is the difference between getting into the market this year or sitting on the sidelines for another two.
What’s Actually Available Right Now
NSW runs a few separate schemes, and they work differently depending on whether you’re buying new or established. Here’s the honest breakdown:
1. First Home Buyers Assistance Scheme (Stamp Duty Exemption)
This is the big one. Under the First Home Buyers Assistance Scheme (FHBAS), you pay zero stamp duty on homes up to $800,000 — whether the property is new or established. That’s a saving of around $30,000 to $31,000 depending on the exact purchase price.
If your purchase lands between $800,000 and $1,000,000, you’re still entitled to a concessional rate on a sliding scale. At $850,000 for example, you’re paying roughly a quarter of the full duty amount. Cross $1,000,000 and the full stamp duty kicks in — which on a $1.1M purchase runs to about $44,000.
That $1M cliff is real and it matters. In Western Sydney and parts of Parramatta, the difference between a $999,000 and $1,010,000 property can be $40,000 in tax. Worth knowing before auction day.
2. First Home Owner Grant — $10,000 Cash (New Builds Only)
The First Home Owner Grant (FHOG) gives you $10,000 on top, but only if you’re buying or building a brand-new home. The property value cap sits at $600,000 for a completed new home, or $750,000 for a house-and-land package (land plus build combined). Established homes don’t qualify, so if you’re buying a second-hand property, this one’s off the table.
In practice, the FHOG is most useful for buyers looking at new apartment buildings or house-and-land packages in Sydney’s growth corridors — think Box Hill, Marsden Park, Oran Park, or Leppington. If you’re considering something in those outer west suburbs, it stacks cleanly with the stamp duty exemption.
3. First Home Guarantee (5% Deposit, No LMI)
The federal First Home Guarantee (FHBG) lets eligible buyers purchase with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI). The government essentially guarantees the remaining 15% of a standard 20% deposit with the lender.
LMI on a 5% deposit for a $850,000 property can exceed $20,000. Avoiding it matters. Places are limited each financial year, so it’s worth checking availability early rather than assuming you’ll get a spot.
4. First Home Super Saver (FHSS) Scheme
The FHSS scheme lets you contribute extra money into your superannuation and then withdraw it (plus the earnings) for a first home deposit. The tax treatment inside super is more favourable than saving in a normal bank account — you’re paying 15% tax on contributions instead of your marginal rate, which for someone on $90,000+ income is a meaningful difference.
The maximum you can release under FHSS is $50,000 per person ($100,000 for couples buying together). It’s not a fast scheme — it works best for buyers who start early and use it consistently over two to three years. If you’re 12–18 months from buying, talk to a broker and a financial adviser together to see how it fits your structure.
Where the Schemes Actually Work in Sydney
Let’s be honest about the Sydney market. Most standalone houses in the Inner West, Eastern Suburbs, or even a lot of the Hills District have long since passed the $800,000 and $1,000,000 thresholds. That doesn’t mean the schemes are useless — it means you need to know where they still apply.
Western Sydney and Outer West
This is where the FHBAS exemption has the most real-world impact. Suburbs like Merrylands, Guildford, Campbelltown, and Penrith still have units and even some entry-level townhouses under $800,000. With median unit prices in Parramatta sitting around $620,000–$650,000, a buyer picking up a 2-bedroom apartment there pays zero stamp duty and potentially qualifies for the First Home Guarantee. That’s a clean combination.
Further out, the Western Sydney Airport corridor (Badgerys Creek, Luddenham, Orchard Hills) is generating investor interest, but for first home buyers, house-and-land packages in nearby Box Hill and Vineyard can hit that $750,000 combined threshold for the FHOG — meaning you’re potentially stacking a $10,000 grant, $0 stamp duty, and no LMI all at once.
Hills District
Castle Hill and Baulkham Hills houses have median prices in the $1.85M–1.92M range — well outside any first home buyer scheme. But Hills units tell a different story. 2-bedroom units around Kellyville and Rouse Hill can still sit in the $725,000–$780,000 range, putting them right in the FHBAS sweet spot. The Metro Northwest line running through Castle Hill, Kellyville, and Rouse Hill stations makes these areas genuinely liveable for buyers who don’t need a backyard.
Parramatta
Parramatta is Sydney’s second CBD and it’s still generating strong rental demand despite higher rates. For first home buyers, unit prices at $620,000–$650,000 median mean the stamp duty exemption fully applies. The challenge is competition — investors are attracted to Parramatta units for yields of 4.5%–5.6%, so listings don’t sit long. Getting finance pre-approved before you start inspecting isn’t optional in this market, it’s baseline.
Stacking It All Together
Here’s a realistic example. First home buyer couple in Sydney, combined income of $160,000, targeting a new 2-bedroom unit in Kellyville priced at $780,000:
- Stamp Duty: $0 (FHBAS full exemption, under $800,000) — saves ~$29,000
- FHOG: $10,000 cash grant (new build, under $750k combined — may require checking developer contract)
- First Home Guarantee: 5% deposit (~$39,000), no LMI — saves ~$18,000
- FHSS: Up to $100,000 combined from super contributions if they’ve been saving inside super
That’s potentially $47,000–57,000 in savings and grants before they even walk through the door. The difference between knowing your options and not knowing them is not trivial.
What the Rate Rise Changes
Yesterday’s RBA decision taking the cash rate to 4.85% will affect borrowing capacity. Lenders use a serviceability buffer of 3% above the loan rate, which means the actual rate used to assess whether you can service the loan is now sitting above 8% for many products. That will reduce the maximum loan amount some buyers can qualify for.
If you’re close to your borrowing limit, now is a good time to get a broker to run the numbers before you commit to a price range. The gap between what you think you can borrow and what a lender will approve has narrowed across the board in 2026.
That said, the schemes themselves haven’t changed. The thresholds haven’t moved. And in a market where affordability is under pressure, the $30,000–$40,000 stamp duty saving is more meaningful than it’s ever been — not less.
Get the Full Picture Before You Buy
NSW schemes sound straightforward on paper, but they come with eligibility rules, timing conditions, and interactions with each other that catch buyers off guard. The FHOG, for instance, needs to be claimed through your lender at settlement — it’s not automatic. The First Home Guarantee has a finite number of places that can run out mid-year. And FHSS withdrawals need to be requested from the ATO before you sign a contract.
Getting all three moving together takes some coordination. At Loan Connect, we work with first home buyers across Greater Sydney — from Parramatta to the Hills to outer Western Sydney — and part of what we do is make sure you’re not leaving government money on the table. If you’re getting ready to buy, give us a call on 1300 855 155 and we’ll map out exactly what you qualify for before you start making offers.
This article is general information only and does not constitute financial advice. Scheme eligibility, thresholds, and availability are subject to change. Speak to a licensed mortgage broker and check Revenue NSW for current terms before making any decisions.
