First Home Buyer Schemes in NSW: What You Actually Qualify For

There are three first home buyer schemes that matter in NSW in 2026, and most first home buyers don't fully understand any of them.

I've watched people miss out on tens of thousands of dollars because they didn't realise they qualified. I've also watched buyers structure a purchase the wrong way and lose eligibility on a technicality.

Here's a plain-English run-through of the three schemes, who actually qualifies, and the things that catch people out.

The three schemes at a glance

1. First Home Buyers Assistance Scheme (FHBAS) — NSW state scheme. Eliminates or reduces stamp duty on your first home.

2. First Home Owner Grant (FHOG) — NSW state scheme. A $10,000 cash grant for first home buyers building or buying new (not established).

3. First Home Guarantee — federal scheme. Lets you buy with a 5% deposit and avoid Lenders Mortgage Insurance (LMI). The federal government effectively underwrites the missing portion of your deposit.

These are independent schemes. You might qualify for one, two, or all three — they generally don't rule each other out, but each has its own eligibility rules and they can interact in practice (especially around lender requirements). Worth running your specific situation past your conveyancer and broker together.

Scheme 1: First Home Buyers Assistance Scheme (FHBAS)

This is the big one. Stamp duty on a typical $800,000–$1M Sydney first home is roughly $30,000–$40,000. FHBAS can wipe it out.

For existing or new homes:

• Up to $800,000 — full exemption (no stamp duty at all)
• $800,001 to $1,000,000 — concessional rate (reduced duty)
• Over $1,000,000 — no concession, full duty applies

For vacant land:

• Up to $350,000 — full exemption
• $350,001 to $450,000 — concessional rate

Eligibility:

To qualify, you (and your co-buyer, if any) must:

1. Be over 18.
2. Have never owned residential property in Australia before (anywhere — not just NSW).
3. Be a permanent resident or Australian citizen — at least one of you.
4. Move in within 12 months of settlement.
5. Live there for at least 12 continuous months.

The traps:

Buying with someone who's owned before. If your partner owned an apartment in 2014, even briefly, you lose FHBAS for the whole purchase — even if your partner's name isn't on the new title. Revenue NSW looks at "spouses or de facto partners" jointly.

Owning land but not a home. If you've previously owned vacant land in Australia and never lived on it as your principal place of residence, you may still qualify. The detail matters — always check before relying on it.

Inheriting a property. If you've inherited residential property, you've owned residential property. Usually rules you out.

Owning property overseas. Currently doesn't rule you out, but Revenue NSW asks about it and the rules have tightened over time. Always declare.

The 12-month residency requirement. You must move in within 12 months and live there for 12 months. Buying as an investor, then deciding to move in years later, doesn't qualify.

Revenue NSW audits FHBAS claims. If you've claimed and didn't satisfy the residency requirement, they can claw back the duty plus penalty interest.

Scheme 2: First Home Owner Grant (FHOG)

This is a $10,000 cash grant. Useful, but narrower in scope than FHBAS.

Eligibility:

• New home only — newly built, off-the-plan, or substantially renovated (not a 50-year-old free-standing house).
• Newly built home (already constructed): purchase price no more than $600,000.
• House-and-land package or building contract: combined value (land + build) no more than $750,000.
• Same standard rules apply: 18+, never owned residential property before, citizen or permanent resident, move in within 12 months, live there for 12 continuous months.

The traps:

Price cap is on the property, not your loan. A $620,000 unit doesn't qualify even if you're borrowing less than $600,000.

"Substantially renovated" is a specific GST definition. Repainting and a new kitchen don't make it a substantially renovated home. Ask your conveyancer if you're unsure.

Application timing. You apply through Revenue NSW after settlement. You have 12 months to apply.

Combined with the FHBAS stamp duty exemption (which covers new homes up to $800,000), a buyer buying a $580,000 new apartment can save:

• Stamp duty: ~$20,500 (exempt under FHBAS)
• FHOG: $10,000 cash
• Total: ~$30,500

That's a serious amount of money for a first home buyer.

Scheme 3: First Home Guarantee (federal)

The First Home Guarantee — federal, run by Housing Australia — lets eligible first home buyers buy with a deposit as low as 5% and avoid Lenders Mortgage Insurance (LMI).

LMI on a 5% deposit purchase is typically $20,000–$40,000, added to your loan. The Guarantee scheme means you don't pay it.

Recent changes (effective 2026):

• The previous 35,000-place annual cap has been abolished — the scheme is now open to all eligible first home buyers.
• The income cap has been removed.

Eligibility:

• Australian citizen or permanent resident, 18+
• First home buyer (you and your co-applicant — same rule as FHBAS)
• Buying as an owner-occupier
• At least 5% genuine savings
• Property within the relevant price cap for the region

Price caps in NSW (for 2026):

• Sydney and capital city regions (including Newcastle, Lake Macquarie, Illawarra/Wollongong): $1,500,000
• Rest of NSW: lower cap — check Housing Australia's current list

That $1.5M Sydney cap is generous. A lot of Sydney apartments and townhouses sit comfortably under it.

The traps:

Not all lenders participate. Housing Australia has a panel of participating lenders. Your usual bank might or might not be on it.

5% genuine savings means genuine. Gifts from parents, sudden inheritances, and one-off windfalls usually don't count. Your lender will generally want to see consistent saving over at least 3 months.

Eligibility is per applicant. If one of you doesn't meet citizenship or first-home-buyer status, the whole application falls over.

How the three stack on a real purchase

A 32-year-old couple, both first home buyers, both Australian citizens, buying a $750,000 brand-new apartment in inner Sydney:

• FHBAS: Property is under $800,000 — full stamp duty exemption. Save ~$28,000.
• FHOG: New home under $600,000? Just over — they wouldn't qualify here. Worth checking if there's any room to negotiate price down.
• First Home Guarantee: Under $1.5M Sydney cap — qualifies. Buy with 5% deposit ($37,500) instead of 20% ($150,000), avoid LMI of approximately $25,000.

Net effect: stamp duty saved (~$28,000), LMI saved (~$25,000), deposit needed reduced by $112,500.

This is the kind of stacking that turns "we can't afford it yet" into "we can afford it now."

Things I get asked all the time

"Can I buy with my parents as guarantors and still qualify?"

A guarantor isn't an owner. They sign on the loan but aren't on the title. So yes, you can still qualify for first home buyer schemes if a parent guarantees your loan.

"My partner owned an apartment overseas — does that count?"

For FHBAS, ownership of residential property anywhere in Australia rules you out. Overseas property is not currently disqualifying, but disclose it on the application. The rules can change.

"What if I buy an investment property first, then later buy my own home?"

You'd no longer be a first home buyer when you bought the second property. You'd lose all three schemes. This is one of the most common mistakes I see — people think "investment first, home later" but don't realise it costs them tens of thousands in lost concessions.

"What if I'm buying with someone who has owned property before?"

You lose FHBAS and FHOG. The First Home Guarantee requires both applicants to be first home buyers. So all three schemes are off the table. If this matters, talk to your conveyancer and broker about ownership structures.

What we do at Malko Conveyancing

Before we exchange on a first home purchase, we calculate your eligibility for all three schemes and apply for them where you qualify. The FHBAS goes through automatically as part of duty assessment. The FHOG application is lodged post-settlement. The First Home Guarantee is run through your lender, but we coordinate with them to make sure the property and contract structure don't disqualify you.

If you're a first home buyer and you're not sure which schemes you qualify for, or you're worried about a partner's previous ownership status — book a free 15-minute call. We'll work through your situation specifically.