The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP.1456 YOUR 2025 NSW FIRST HOME GUIDE - DEADLINES, GRANTS & MUST-KNOWS
Ready to take the leap into property ownership in 2025? The rules are changing, and they might just work in your favour.
This candid discussion cuts through the confusing jargon of government schemes to deliver a straightforward guide for first home buyers navigating Australia's property market. We unpack the current First Home Buyer Assistance Scheme (FBAS) in NSW, which offers substantial stamp duty savings of up to $31,000 on properties under $800,000, before diving into the game-changing updates coming in 2026.
The most exciting developments? From January 2026, price caps for the low deposit scheme will increase dramatically to $1.5 million in metropolitan areas (up from $900,000), while income caps disappear entirely from July 2025. This means buyers can enter the market with just a 5% deposit regardless of their income level – a significant shift that opens doors for high-earning professionals previously excluded from these incentives.
We also tackle practical concerns like purchasing tenanted properties (did you know you have up to 12 months to move in?), how rental income can actually help your mortgage payments, and the simplest way to apply for these schemes without drowning in paperwork. The secret? Having the right broker and solicitor in your corner handling the complex documentation while you focus on finding your perfect property.
With property prices continuing to rise and assistance at unprecedented levels, the next 12-18 months present a unique opportunity for first home buyers. Whether you're actively house-hunting or just beginning to save, understanding these changes now puts you in the best position to benefit when the right property comes along.
Subscribe to our podcast for more insider knowledge and practical tips as we continue to track these important developments in Australia's property market. Your journey to homeownership starts with being informed – we're here to guide you every step of the way.
Good morning 2025. This is your first homebuyer guide to purchasing your property this year. Stay tuned, we're going to give you all the tips.
Speaker 2:I'm the ringleader, so let's go.
Speaker 3:Well, well.
Speaker 2:Look at you guys, the twins.
Speaker 3:The twins Tweedledee and Tweedledum.
Speaker 1:One finds the property, one finances the property.
Speaker 2:There, you go, there, you go, there, you go there you go. What's that Sorry?
Speaker 3:What a fresh face. Nice change to have you on. Yeah, well, I'm going to be joining.
Speaker 2:I'm here every Tuesday now and I didn't get off to. I got off to a bit of a false start. I hooked my phone up to where we usually pop it into and the whole thing snapped. I'm so hopeless with technology, so I'm actually sitting here. You should see my setup. It's hysterical. I've got like a book and like a pencil case holder and I'm just holding my phone on it. But whatever, the show must go on, right, boys.
Speaker 1:That's it. Yeah, the show is at the end. Keep the viewers watching for a sec.
Speaker 1:Yeah, exactly at the end and keep the viewers watching for a sec. Yeah, exactly, we're talking about the first home buyer, I guess changes coming into effect from the first of july. Um, it's going to be quite a big 12 months for first home buyers and I know this story gets replayed and replayed and replayed and to a lot of people it's just jargon, it's real estate language that no one understands. So we're going to try and simplify things for you this morning. Break it down and just talk normal english.
Speaker 3:Yeah, I think well, first home buyers. There's, you know, always a new era of first home buyers, right, it's like, yeah, you get born, you grow up a little bit, then you buy your first home. So there's always a new wave that needs to hear things and what's happening, and there's, as everything else changes, so do the first home buyer incentives, so we can talk 100% and you know national level ones and how lucky.
Speaker 2:I know everyone complains about the escalating cost of prices, property prices and interest rates, but how lucky that these guys get the opportunity to get a little bit of a helping hand from the government. But I've got to say, zach, like you know, working in real estate, I literally had to sit and chat GPT a whole lot of stuff, and my spiel to chat GPT was can you break this down into easy to understand terms? And I think that's what we need to do today Break it down for the people so that these guys can understand exactly what's going on with the first home buyer scheme and the new ones that are taking effect in January. So what is it? What is the first home buyer scheme? Let's just talk about that really briefly.
Speaker 3:Yeah, so there's FBAS is what it's termed is the First Home Buyer Assistance Scheme in New South Wales. So that's a state based scheme and that's incentivising first home buyers around the cost of stamp duty. So at the moment it's $800,000. You pay zero stamp duty if you're an eligible first home buyer. So there's some eligibility requirements around must be a citizen over 18, must be buying as a person, so not a company or a trust, and you mustn't have held property previously. Now the changes that are coming in, there are some changes that will be offering repeat buyers that stamp duty concession. I think it's around 10 years that they mustn't have owned a property that they can then again be eligible for that stamp duty concession. I think it's around 10 years that they mustn't have owned a property that they can then again be eligible for that stamp duty exemption. So zero stamp duty will be the cost. So zero dollars up to eight hundred thousand dollars, and then there's a concession up to a million. So we've got a.
Speaker 1:We've got a stamp duty table like calculator on the back of our magazine we produce every week you see it at a lot of the open homes. That's a saving of about $31,000 in stamp duty. So it's a massive leg up because what happened previously was buyers were taking $31,000 out of their deposit to put that aside for you know, the tax Stairtude is around 4.2% of the property price, right if you're not eligible for the consent.
Speaker 3:So it's a big chunk back in the pocket and it's, you know, allowing people to get their funds. It's huge. But $800,000.
Speaker 2:Now, correct me if I'm wrong. Um, and I know I'm not because I work in property on the northern beaches um, eight hundred thousand dollars used to buy you quite a bit. You know, you'd be able to get that your foot into the door of an older style two bedroom apartment on the northern beaches, or you'd be able to buy a really nice, fancy one bedroom apartment. But things have changed, billy, haven't they like? Property prices went up. Um, it's not going to buy you a huge amount these days is is that locked at eight hundred thousand dollars?
Speaker 1:we've got your concessional rate up to a million dollars, where you get part of the um concession. However, you know, the closer you get to a million dollars which is now the new norm median unit price for dy's is nine hundred fifty thousand um. You know, the closer you get to a million dollars, which is now the new norm median unit price for DY is $950,000. You know you're not saving a great deal. So that's where the changes are going to hopefully benefit people because they're going to increase those price caps. But you're right, it doesn't get you a huge amount and fortunately for homeowners that already purchased. You know, when the government introduced the no stamp duty under $800,000, it actually helped push property prices up a little bit because it was giving people those funds back. That's the reality.
Speaker 2:Yeah. So what's changing, zach? There's some new changes coming into play. Is that correct from the 1st of January 2026?
Speaker 3:Yeah, so that's on the national level. So there's the Housing Australia first home guarantee scheme, which is the low deposit scheme. So if you look at it in a sense that you can enter the property market as an eligible first home buyer under a national scheme with as little as five percent deposit, there are price caps associated with that as well. Currently it's 900 000 in. So Metro, new South Wales, so yeah, newcastle and Sydney um included as far as um there, from the first of uhuary 2026 the government is increasing that price cap to 1.5 million dollars, so your deposit then effectively becomes 75 000 as the entry point for that, that price range. So I mean that's going to open up and consider a lot of where the property prices have gone um and maybe capture a little bit more of the first-time buyer market that are on different income levels, because the other change in the same scheme that's underneath the price cap is also the income caps. So this financial year and for the rest of the calendar year the income caps will remain.
Speaker 3:Sorry to the end of this financial year the income caps will remain at 125 000 and 200 000. If you're applying as a couple from first of july this year the income caps are eliminated. So if you're on 250 000 as a single, you'll be eligible with a five percent deposit.
Speaker 2:So so just five yeah, exactly right.
Speaker 3:So okay, even if you have a ten% deposit, it's meaning that you don't have to save as much or you can get into the market sooner. So that's going to really capture a lot of the rest of the market for first-time buyers that are above that income.
Speaker 2:I've got a question for you because we do find, particularly in areas like DY I do on the Northern Beaches I do find that a lot of these properties circa, you know, $800,000 to $900,000 are tenanted. And so if I'm a first-time buyer and there's a tenant in the property that I'm purchasing, what happens there? Like you know, say, for instance, there's a lease on the property for you know another six months what happens there, because obviously that lease rolls over with the property, for you know another six months what happens there, because obviously that lease rolls over with the property. But what do I do if I'm a first-time borrower and I have to move in?
Speaker 3:So you've got the time period that you will need to move in within. So if you settle the property, then six months later or 12 months later you've got to move in with the intent to be there for at least 12 months. So you've got to show that in the first 12 months so you might move in in the 11th month that you've owned it, so that lease can run for another 11 months since you've owned it.
Speaker 2:Okay, wow.
Speaker 3:Yeah, and then you move in and I mean, look, it's down to the forms that you fill out, and then you know you're obviously moving in. You'll have your water bills there, your electricity bills and your mail going there. So that's obviously the evidence that you'll be having to show that you've moved in there in the required time frame.
Speaker 2:To continue on the scheme, and that's really helpful, isn't it, Billy? Like I think you've been in this situation yourself, you know, I think that's quite helpful. If you've got a tenant already in a property you've purchased it, you're a first-time buyer. I think that's quite fortunate in many ways, because you've got that rent coming in every week, which is helping go towards your mortgage repayments, right? That's a huge help, Billy.
Speaker 1:Like the biggest, I think, fear for a first home buyer is first of all spending two years saving a deposit longer you know then going and spending all the money and then, having no cash flow to you know, basically go into repayment. So if you can have a tenant help you just with a stepping stone or give you sort of six months preparation to moving in, it's the easiest transition into the property and then set it up as your principal place of residency.
Speaker 3:And I think there's also a little bit of consideration from the lenders. One in particular is now considering for an owner-occupied purchase and including for serviceability. So when you do serviceability, it's income-based. It's based on your job. However, you're making income. If you need some more servicing and you're buying a two-bedroom apartment as a first-time buyer, we can use $150 a week as proposed rental income as board, if you you know you get a friend to move in or you've got someone that's that's going to move in with you, but they're not going to be on the loan or on the title with you, but they're going to help you pay. So yeah, there's that. There's a couple of things that the banks are doing to help that serviceability case, to help people get into potentially more suitable asset.
Speaker 2:Yeah, genius so, guys, the million dollar question, how do people apply? Because you know we we've got a, we've got a daughter who's 19 and, um, we were just helping her go through it all. But you know, we were making her do a lot of the homework and I've got to say you punch in first home buyer scheme into google. It's not fun. It's not fun, it's very text heavy. What's the best way? For you know? And look, I think most parents are, you know, wanting their kids to do a lot of this research themselves. How else are they going to learn? Um? But I've got to say I took a look at it and I was like yeah, it's true, yeah, oh, look there's.
Speaker 3:It's a bit of a minefield for information out there and I guess the best way that you can apply it's not like something you apply for prior to you know, looking at property or something like that it's something that happens at the same time.
Speaker 3:So typically you get a pre-approval and for the national scheme, we would um, we would lodge that documentation. As the broker, we've got the housing australia documentation. For the low deposit scheme, yeah, that weed lodge. And then for the state-based stamp duty scheme, that's a form that you fill out with your solicitor at the point of the property transaction, so prior to settlement, when they're doing all the adjustments for the settlement figures. So your amount that you're contributing to the property, the bank's funds that they're contributing, and then you've got the, the form that the solicitor will provide you, which is on the state level. The state recovery office will nominate you as a first time buyer. Therefore it will waive or concede on stamp duty costs. So two parts For the National Low Deposit Scheme, it's through your broker or your bank, with the relevant forms at the time of the loan application, yep, and then with your solicitor for the stamp duty waiver.
Speaker 1:So the good news is I'll put this really simple. For a buyer, you don't do any work. You just need to have a good broker and a good solicitor in your corner, and that's why we harp on so much about just building the property team in your corner, and it's it's. It's actually just about positioning yourself with the good people around you to help that process become a lot easier. Um, I can't, can't. Um, you know, vouch enough for the guys that help me. It makes a world of difference when you've got someone good in your corner. So I think it's nice if you can build those relationships six to twelve months out before you actually go and purchase. It takes out a lot of that stress because you, you know, you've obviously got enough on your mind whilst you're going through open homes and just focusing on trying to buy the right place.
Speaker 3:You don't need the paperwork hassle, and that's why, when you can get a pre-approval and it's valid for 90 days, you might as well say well, if I'm buying in, you know, the middle of the year, I'll set myself up in the, you know, first month or two yeah, exactly, and I think even keeping your finger on the market, like finger on the pulse sort of thing, and speaking to people like yourselves, because there's a lot of first-time buyers stop in in dy and surrounds and with the lift in the caps, you know, there's probably going to be a little bit of a bubble. Maybe we'll see a little bit of upward pressure on prices. Um, so, actually realizing what your borrowing capacity is, what your funding goal is for your savings and therefore what your purchase price is, so you can see what's suitable in your area and you can see what's tracking in the market and watch what Billy's selling, watch what Billy's got open.
Speaker 1:Look, yeah, we'd love to help and we've done the averages across the price points. They're not impossible to find, but they don't come up that often. These price caps will help that, but we do want to make sure you're onto things quite quickly when the right place comes up. So that's it, reach out.
Speaker 1:Let us know if we can help anymore. I reckon this is going to be a great first you know, next 12 months to buy as a first-time buyer and, to be honest, we've never seen more help, assistance and incentives, so you couldn't ask to be, you know, better timing. Really Too right.
Speaker 3:Anything else to sign off with oh, better timing really Too right. Anything else to sign off with? Oh, we can put some of the links in the comments, I guess for the schemes.
Speaker 1:Yeah, the best website I've seen is the Housing Australia scheme for the federal stuff. Yeah, and you just put that into Google Housing Australia and it will pop up there. Awesome, have a good day.