If you’re trying to buy your first home in Sydney, stamp duty is probably the number that’s keeping you up at night. On a $900,000 apartment in Parramatta or a townhouse in Blacktown, you’re looking at tens of thousands of dollars on top of your deposit. That’s a serious chunk of cash — and a lot of first home buyers don’t realise they may not have to pay it at all.
Here’s what’s actually available in NSW right now, what the thresholds mean in real terms, and how to set yourself up properly before you make an offer.
The Big One: No Stamp Duty Up to $800,000
Under the First Home Buyers Assistance Scheme (FHBAS), eligible first home buyers in NSW pay zero stamp duty on properties valued up to $800,000. On a home at that price, you’d normally owe around $31,335 in transfer duty. That is your exemption — gone.
For properties priced between $800,000 and $1,000,000, you won’t get a full exemption but you’ll pay a concessional rate — a sliding scale that reduces what you’d owe compared to a regular buyer. The saving at $900,000 is still around $15,000. That’s worth understanding before you decide a property is “just out of budget.”
Above $1,000,000, the concession disappears. Standard transfer duty applies. This is one of the reasons the $1 million mark is such a psychological cliff for first home buyers — it’s not just a round number, it’s a real cost jump.
Does It Apply to Existing Homes or Just New Builds?
Both. The FHBAS applies to new and existing homes, as long as the property is valued under the relevant threshold. This is different from the First Home Owner Grant (more on that below) which only applies to new homes.
So if you’re eyeing a two-bedroom unit in Liverpool, a terrace in Marrickville (you’d need a time machine for that one, but hypothetically), or a house in Penrith — if it comes in under $800k and you meet the criteria, you qualify.
Vacant land also qualifies, with a full exemption up to $350,000 and a concessional rate up to $450,000 — relevant if you’re thinking about buying land and building.
Who Actually Qualifies?
The eligibility rules are straightforward but strict. You need to:
- Be an Australian citizen or permanent resident
- Be at least 18 years old
- Have never owned residential property in Australia (this applies to you and any co-purchaser)
- Move in as your principal place of residence within 12 months of settlement
- Live there continuously for at least 12 months
The one that trips people up most often is the co-purchaser rule. If you’re buying with a partner who has previously owned property — even interstate, even years ago — neither of you qualifies for the exemption. This is one of those situations where talking to a broker before you make an offer can genuinely change your strategy.
The $10,000 First Home Owner Grant
If you’re buying or building a new home, you may also be eligible for the First Home Owner Grant — a $10,000 cash payment from the NSW Government. To access it, the property needs to be a new home (never been lived in) valued at up to $600,000, or a land and construction contract up to $750,000.
The FHOG and FHBAS can be stacked. So if you’re buying a new townhouse in a development for $750,000, you might be looking at $10,000 grant plus zero stamp duty. That’s a meaningful boost toward your deposit or settlement costs.
In Sydney’s current market, finding a new home under $600,000 takes some searching — but it exists in the outer west and southwest, and with house-and-land packages in growth corridors like Marsden Park, Oran Park, and Box Hill.
What About the Old Stamp Duty vs Land Tax Choice?
A quick note if you’ve been reading older articles online: the First Home Buyer Choice scheme — the one that let you opt into an annual property tax instead of paying stamp duty upfront — closed to new applicants in July 2023. If you’re buying now, that option isn’t available. The FHBAS exemption described above is what’s current.
How Does This Affect Your Borrowing?
Here’s where it gets practical. Stamp duty doesn’t come out of your home loan — it comes out of your savings. So every dollar you save on duty is a dollar that can stay in your deposit, which directly affects your loan-to-value ratio (LVR).
If you were budgeting $30,000 for stamp duty on an $800,000 property and you now don’t have to pay it, you’ve effectively strengthened your deposit by that amount. That could mean the difference between sitting at 88% LVR (triggering Lenders Mortgage Insurance) and getting closer to 85%, or between 90% and 95%.
LMI on an 88% loan on an $800,000 property can add $15,000 to $20,000 to your total loan cost. Knowing your numbers — and structuring your purchase accordingly — is how smart first home buyers avoid getting hit twice.
Don’t Wait Until After You Sign
The biggest mistake first home buyers make with stamp duty exemptions is treating them as an afterthought — something you sort out after exchange. But your eligibility, your LVR, your grant strategy, and whether your co-purchaser’s history affects your application — these all need to be mapped out before you make an offer.
A mortgage broker who works regularly with first home buyers in Sydney can run through your full position: what you qualify for, how much you can borrow, which lenders have the right products for your situation, and how to structure the purchase so you’re not leaving money on the table.
At Loan Connect, we work with first home buyers across Sydney every week — from buyers targeting the inner west to those going further out to make the numbers work. If you want a clear picture of what you actually qualify for, reach out for a no-obligation chat. We’ll tell you exactly where you stand.
Ready to work out your stamp duty position and borrowing power? Get in touch with the Loan Connect team today.
