Stamp Duty Exemptions for First Home Buyers in NSW: What You Need to Know

Saving a deposit is hard enough. What catches many first home buyers off guard is the cost that sits on top of it: stamp duty.

In NSW, stamp duty is officially called transfer duty. It is a state tax, collected by Revenue NSW, and on a typical home purchase it can run to tens of thousands of dollars. The good news is that if you are buying your first home, you may be able to pay none of it, or a reduced amount, under the First Home Buyers Assistance Scheme (FHBAS).

But the scheme has strict rules. Miss one, and you could lose the exemption, or find yourself owing duty, interest and penalties later. This guide explains how the stamp duty exemption works for NSW first home buyers, who qualifies, how off-the-plan purchases are treated, and the mistakes we see most often.

The short answer If you are an eligible first home buyer and you exchange contracts on or after 1 July 2023:

• New or existing home valued up to $800,000: full exemption from transfer duty
• New or existing home valued above $800,000 and below $1 million: concessional (reduced) rate
• Vacant land valued up to $350,000: full exemption. Above $350,000 and below $450,000: concessional rate
• You must also move in within 12 months of settlement and live there for at least 12 continuous months (for homes)

What is the First Home Buyers Assistance Scheme (FHBAS)?

The FHBAS is a NSW Government scheme, administered by Revenue NSW, that gives eligible first home buyers a full exemption from, or a reduced rate of, transfer duty under the Duties Act 1997 (NSW).

Two points are worth understanding from the start:

• It is a duty exemption or concession, not a cash payment. You are not handed money; you simply pay less (or no) duty on your purchase.
• It applies to both new and existing homes, and to vacant land. This is a key difference from the First Home Owner (New Homes) Grant, which is only for newly built or substantially renovated homes (more on that below).

Current FHBAS thresholds

These thresholds apply to contracts exchanged on or after 1 July 2023:

Above those upper limits, full transfer duty applies and no FHBAS concession is available.

The concession in the middle band is a reduced rate, not a flat discount. As a general rule, the closer your property’s value is to the upper limit, the less benefit you receive. The most reliable way to see what you would actually pay is the First Home Buyers Assistance calculator on the Revenue NSW website, and your conveyancer can run the numbers for your specific contract.

Thresholds have changed over time. For example, contracts exchanged between 1 August 2021 and 30 June 2023 were subject to lower limits ($650,000 for a full exemption). Always check which thresholds apply to your contract date.

💡 Tip: The thresholds apply to the dutiable value of the property, which is usually the purchase price but not always. If you are shopping near the $800,000 line, or bidding at auction, get advice before you commit. A small difference in price can change your duty bill by thousands of dollars.

Who is eligible for the first home buyer stamp duty exemption?

To qualify under the FHBAS, the following must generally be true:

• The purchase is of a new or existing home, or vacant land, in NSW
• The property value is within the threshold amounts
• The transfer is for the whole property
• You are buying as an individual (not through a company or trust)
• You are over 18
• You and your spouse or partner have never owned or co-owned residential property anywhere in Australia
• You and your spouse or partner have never previously received an exemption or concession under the scheme
• At least one of the first home buyers is an Australian citizen or permanent resident
• For homes, you meet the residence requirements (see below)

The requirements to be an individual and over 18 can be waived on application in some circumstances, which Revenue NSW assesses individually.

Note that the “never owned” test looks at you and your spouse or partner. For this scheme, a spouse is someone you are legally married to, or living with in a de facto relationship. If you are legally married but separated, you are not treated as having a spouse if you are no longer living with that person and have no intention of doing so.

Buying with someone who isn’t eligible for the stamp duty exemption

If you are buying with someone who isn’t a first home buyer, you may still be able to apply, provided you and any other eligible buyers are purchasing at least half of the property. This is treated as a shared equity arrangement. Two important limits apply:

• It does not apply if the ineligible buyer is your spouse
• The ineligible buyers must pay transfer duty on the share they are acquiring

This is a common situation for buyers helping a family member into the market, and it is one where getting the contract and ownership structure right before exchange matters.

Foreign persons and surcharge purchaser duty

Being eligible for the FHBAS does not exempt a foreign person from surcharge purchaser duty. If you, or someone you are buying with, is a foreign person for NSW duty purposes (this can include some New Zealand citizens and permanent residents who are not ordinarily resident in Australia), surcharge purchaser duty may apply on that person’s share, in addition to any transfer duty. Revenue NSW has an online tool to help work out whether you are a foreign person, and we can assist with this at the contract stage.

The residence requirement: you have to actually live there

Getting the exemption is not the end of the story. If you are buying a new or existing home, you must meet the residence requirements.

For contracts exchanged on or after 1 July 2023, you (or one of the other eligible first home buyers) must:

1. Move into the home within 12 months after settlement, and
2. Live in it as your principal place of residence for at least 12 continuous months

For contracts exchanged between 1 July 2017 and 30 June 2023, the continuous occupation period is 6 months. Members of the permanent forces of the Australian Defence Force may be exempt from the residence requirement in certain circumstances.

The residence requirement does not apply to vacant land, but different rules will apply to the home you later build.

If your circumstances change

Life happens: a job offer interstate, a relationship breakdown, a family emergency. If you can’t meet the residence requirement, you are no longer eligible for the scheme, and you must inform Revenue NSW immediately so the correct duty can be arranged. If you don’t, you may face interest and penalties.

In special cases, Revenue NSW may allow a shorter residence period or waive the requirement altogether, but this is decided case by case on a written request. If you are in this position, speak to us before you contact Revenue NSW.

💡 Tip: Keep evidence that you moved in and stayed, such as utility bills, an updated driver licence address, electoral roll registration and mail received at the property. Revenue NSW can check compliance, and recommends keeping these records for at least five years.

Buying off the plan: deferring your stamp duty

Off-the-plan purchases (where you sign a contract before the home is built or completed) are common for apartments, townhouses and house-and-land packages. They come with an extra benefit: you may be able to defer paying transfer duty.

Normally, transfer duty must be paid within 3 months of signing the contract for sale (or on or before settlement, if settlement happens earlier). If you buy off the plan and intend to live in the property, you may be able to defer payment for up to a further 12 months. Under the deferral, duty becomes payable at the earliest of:

• 15 months after signing the contract (the usual 3 months plus the 12-month deferral)
• when the property is completed and settlement occurs, or
• when any part of the contract is assigned to another person

Who can defer?

You must meet all of the following:

• Every purchaser must meet Revenue NSW’s citizenship and residency requirements. If any purchaser is a foreign person when the contract is signed, the deferral is not available, even if they expect to become a permanent resident later
• The purchase is not made through a trust or company
• The contract is an eligible off-the-plan agreement: a contract to buy land where a home will be built or developed before the sale completes. A contract for vacant land alone does not qualify, even if you plan to build later
• You buy with the genuine intention of living in it as your principal place of residence
• At least one purchaser moves in within 12 months after settlement and lives there for at least 12 continuous months (for contracts exchanged on or after 1 July 2023)

The deferral is not automatic. Your solicitor or conveyancer must apply for it as part of the duty assessment, with a full copy of your signed contract, a Purchaser/Transferee Declaration for each buyer, and certified proof of identity, citizenship and residency status.

How deferral and the FHBAS work together

It helps to keep these two things separate. The FHBAS determines how much duty you pay. The deferral determines when you pay it. If your off-the-plan purchase is fully exempt under the FHBAS, there is no duty to defer. The deferral matters most where some duty is still payable, for example where the value sits in the concessional band, or above it.

If you tell Revenue NSW you will live in the property and later change your mind (or fail to meet the residence requirement), duty that would have been due at the 3-month mark is treated as overdue, and interest can apply from that earlier date, with possible penalty tax on top. Do not assume you can quietly drop out of the requirement.

The First Home Owner (New Homes) Grant and other support

The FHBAS is separate from the First Home Owner (New Homes) Grant (FHOG), a $10,000 payment for first home buyers who buy or build a new (or substantially renovated) home. Key points:

• The purchase price must not exceed $600,000 for a newly built home, or the combined land and building cost must not exceed $750,000 where you buy land and sign a building contract
• It is not available for established homes
• It is a single grant per property transaction, not per person
• For contracts signed on or after 1 July 2023, the FHOG residence period is also 12 continuous months, and the grant must be repaid if you move out too soon
• The grant may be paid in addition to other exemptions or concessions

There are also Commonwealth schemes (such as the Home Guarantee Scheme, Help to Buy and the First Home Super Saver Scheme) that have their own eligibility rules, set by the Federal Government and your lender. These sit outside the NSW duty system, so speak with your lender or mortgage broker about them. We can help make sure your contract and settlement timetable work with whichever schemes you use.

When and how is stamp duty paid in NSW?

In NSW, transfer duty is generally payable within 3 months of the date of the contract for sale. If settlement is earlier than that, duty must be paid on or before the settlement date. Settlement cannot proceed until duty has been paid.

If you are claiming the FHBAS, the process after exchange of contracts generally looks like this:

1. Your solicitor or conveyancer prepares the First Home Buyers Assistance Scheme application and a Purchaser/Transferee Declaration for each buyer
2. You provide proof of identity documents
3. Revenue NSW assesses the application and issues a Duties Notice of Assessment showing the duty payable (which may be nil) and the due date
4. Any duty payable is paid, and settlement proceeds

If duty is not paid on time, a tax default occurs, interest applies from the date of default until the duty is paid, and Revenue NSW may also apply penalty tax.

⚠️ Scam warning: Revenue NSW has warned about scams involving duty payments and fake communications between buyers and their solicitor or conveyancer. If you receive an unexpected payment request or a change to payment details by email or text, verify it by phoning your solicitor or conveyancer on a number you already know before paying anything.

Common mistakes that can cost first home buyers thousands

1. Assuming you qualify without checking. “Never owned” means never owned or co-owned residential property in Australia, and it applies to your spouse or partner too. Having previously held a share in a property, even briefly, can be enough to knock you out of the scheme.

2. Not checking the price against the threshold before you make an offer. At $800,000 you are fully exempt. Above it, you move into the concessional band, and duty phases in as the value rises. If you are near the line, negotiate (or set your auction limit) with the thresholds in mind.

3. Buying with a spouse who isn’t eligible. The shared equity rule does not help where the ineligible co-buyer is your spouse or de facto partner. This needs to be sorted out before you sign.

4. Buying through a company or trust. The FHBAS is for individuals. A purchase in a company or trust name generally won’t qualify (limited waivers exist, but don’t count on one).

5. Overlooking the residence requirement. You must move in within 12 months of settlement and stay for 12 continuous months. Renting the property out, or planning to renovate for a long period before moving in, can put your exemption at risk.

6. Not telling Revenue NSW when your plans change. If you can’t meet the residence requirement, notify Revenue NSW immediately. Staying silent can add interest and penalties.

7. Missing the payment deadline. Duty is generally due within 3 months of the contract date, or at settlement if earlier. Late payment triggers interest and possible penalty tax, and settlement can’t complete until duty is paid.

8. Giving incorrect information. Revenue NSW checks applications and compares them against data from other government agencies and businesses. Penalties for false or misleading information can be substantial.

How we handle stamp duty at settlement

When you instruct Sheridan Legal on a purchase, duty is part of the conveyancing process from day one, not something left to the last minute:

1. Before you sign: we review your contract for sale and check whether your purchase is likely to qualify for the FHBAS, including the price, the ownership structure and any co-purchasers
2. At exchange: we confirm the contract date, which fixes both the applicable thresholds and the payment deadline
3. After exchange: we prepare and lodge your FHBAS application and Purchaser/Transferee Declaration, and gather proof of identity documents
4. Assessment and payment: we receive your Notice of Assessment, arrange payment of any duty and manage any approved deferral
5. Settlement: we complete the transfer and explain what you need to do to protect the exemption, including your 12-month move-in and 12-month occupation obligations

A note on terminology: in a conveyancing context, “settlement” means the completion of your property purchase. If you are separating and are looking for information about property settlement under the Family Law Act 1975 (Cth), see our family law guide. [INTERNAL LINK: What Am I Entitled To? A Clear Guide to Property Settlement in Australia]

Three quick examples

These are general illustrations only. Every purchase turns on its own facts.

• Alex and Sam buy an established home for $780,000. Neither has ever owned property, and they plan to move in within a few months of settlement. They are within the full exemption threshold, so subject to meeting all other requirements, no transfer duty is payable.
• Priya buys an off-the-plan apartment for $890,000 and intends to live in it. The price is in the concessional band, so a reduced rate of duty applies. If she meets the deferral requirements, she can pay that duty later rather than within the usual 3 months, but not later than settlement or 15 months after signing, whichever comes first.
• Tom buys with his partner, who co-owned a property years ago. Because the “never owned” test applies to a spouse or partner as well, they are unlikely to qualify, and the shared equity rule does not help where the ineligible buyer is a spouse. They need to know this before exchange, so they can budget for full duty.

Frequently asked questions

Do first home buyers pay stamp duty in NSW? Not necessarily. Under the First Home Buyers Assistance Scheme (FHBAS), eligible first home buyers pay no transfer duty (stamp duty) on a new or existing home valued up to $800,000, and a concessional rate applies to homes valued above $800,000 and below $1 million. Full duty applies at $1 million and above. These thresholds apply to contracts exchanged on or after 1 July 2023.

What is the stamp duty threshold for first home buyers buying vacant land in NSW? For vacant land on which you intend to build a home, the full exemption applies to land valued up to $350,000, and a concessional rate applies above $350,000 and below $450,000.

What is the difference between the FHBAS and the First Home Owner Grant? The FHBAS reduces or removes the transfer duty you pay and applies to new and existing homes and vacant land. The First Home Owner (New Homes) Grant is a $10,000 cash grant available only for newly built or substantially renovated homes (purchase price up to $600,000, or up to $750,000 for a land and building package). They are separate, and the grant may be paid in addition to other exemptions or concessions.

Can I use the exemption if my partner has owned property before? Generally no. You and your spouse or partner must never have owned or co-owned residential property in Australia. For this scheme, a spouse is someone you are legally married to or living with in a de facto relationship. If you are buying with someone who is not eligible, you may still be able to apply if you and any other eligible buyers are purchasing at least half of the property, but this does not apply where the ineligible buyer is your spouse. Ineligible buyers pay duty on their share.

How long do I have to live in the property to keep the exemption? For contracts exchanged on or after 1 July 2023, you or one of the other eligible buyers must move in within 12 months after settlement and live there as your principal place of residence for at least 12 continuous months. This applies to new and existing homes, not vacant land. Contracts exchanged between 1 July 2017 and 30 June 2023 require 6 continuous months.

Can I defer stamp duty if I buy off the plan in NSW? Possibly. If you buy off the plan and intend to live in the property, you may be able to defer paying transfer duty for up to 12 months. Duty is then payable at the earliest of 15 months after signing the contract (the usual three months plus the 12-month deferral), when the property is completed and settlement occurs, or when any part of the contract is assigned. All purchasers must meet citizenship and residency requirements, the deferral is not available for purchases through a trust or company, and it is not automatic: your solicitor or conveyancer must apply for it.

When do I have to pay stamp duty in NSW? Generally within 3 months of signing the contract for sale, or on or before settlement if settlement is earlier. If duty is not paid on time, interest applies from the date of the tax default and Revenue NSW may also apply penalty tax.

What happens if my circumstances change and I can’t move in? You must tell Revenue NSW immediately so the correct duty can be arranged. If you don’t, you may face interest and penalties. In special cases Revenue NSW may allow a shorter residence period or waive the requirement, but each request is considered individually and in writing, so speak to us first.

Get advice before you exchange contracts

Stamp duty is one of the largest costs in buying your first home, and the rules are unforgiving of small mistakes. Once contracts are exchanged, the thresholds, deadlines and your obligations are locked in. The best time to check your eligibility is before you sign.

At Sheridan Legal, our conveyancing team helps first home buyers across Kempsey, South West Rocks and the Mid North Coast understand their stamp duty position from the very beginning, so there are no surprises at settlement.

Our conveyancing team provides:

• Fixed-fee pre-purchase contract reviews
• Clear advice on your FHBAS eligibility and your duty position
• Smooth, stress-free settlements

📞 Call us on (02) 6562 3300 to speak with our conveyancing team before you buy, or book an appointment online.

Offices: 22 Belgrave Street, Kempsey NSW 2440 | Prince of Wales Avenue, South West Rocks NSW 2431

Related reading

• The Ultimate First Home Buyer Legal Guide In NSW
• Misunderstanding Cooling-Off Rights
• Missing Critical Contract Clauses
• Inadequate Searches & Strata Issues

Important information

This article is general information only, current as of 8 October 2026, and is not legal or financial advice. Duty thresholds, eligibility criteria and schemes are set by the NSW Government and Revenue NSW and may change; always confirm current requirements with your solicitor or conveyancer or with Revenue NSW before relying on them. Your circumstances may affect whether you qualify.

Sources

• Revenue NSW, First Home Buyers Assistance Scheme: https://www.revenue.nsw.gov.au/grants-schemes/assistance-scheme
• Revenue NSW, Transfer duty for off the plan property purchases: https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/transfer-duty/understanding-transfer-duty/off-the-plan-property-purchases
• Revenue NSW, First Home Owner (New Homes) Grant: https://www.revenue.nsw.gov.au/grants-schemes/first-home-owner-new-homes-grant
• Revenue NSW, Transfer duty: https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/transfer-duty