First Home Buyer’s Guide To Available Government Support
- Orca Home Loans
- Jan 30
- 7 min read
First Home Buyer’s Guide To Available Government Support
Buying your first home in NSW is tough. Fortunately, there is help available.
This guide seeks to help you navigate all of the state and federal government support that is available as at January 2026, so you can better understand:
What support is currently available and any caps that apply,
What specific criteria need to be met in order to be eligible,
What restrictions may apply when utilising one of the schemes,
How these schemes interact, and
Where to go for more information or help to understand whether these apply to you.
The "Big 4" Government Schemes (At a Glance)
There are currently a number of schemes available to support First home Buyers from both state and federal governments. Four of the main government schemes for First Home Buyers are summarised in the table below:
Government Scheme | Key benefit | Property type | Price cap (Sydney) | Income cap | Owner-occupied requirements |
Stamp Duty exemption | Save up to ~$30k upfront | New, Existing, or Land | $800k - full exemption $800k to $1m - partial concession | None | Must live in for 12 continuous months |
5% Deposit (no LMI) | Buy with 5% (Avoid LMI) | New or Existing | Up to $1.5m | None | Must remain owner-occupied during the guarantee period |
Help to Buy | Govt buys 30-40% share. This reduces mortgage size and potentially avoids LMI | New or Existing | Up to $1.3m | Up to $100k (Single) / $160k (Couple) | Must remain owner-occupied |
$10k Grant | $10,000 Cash | New Homes Only | Up to $600k (Purchase) Up to $750k (Build) | None | Must live in for 12 continuous months |
Scheme 1: First Home Buyers Assistance Scheme (FHBAS)
In NSW, Stamp Duty is one of the biggest hidden costs of buying. This scheme provides a full or partial exemption on stamp duty.
The Benefit:
Full Exemption | For homes valued up to $800,000. Saving up to $31,000! |
Concessional Rate | Applied for homes valued between $800,000 and $1,000,000. |
Vacant Land | Full exemption up to $350,000; concession up to $450,000. |
Eligibility Criteria:
Ownership History: You and your spouse/partner must never have owned residential property in Australia previously.
Residency: You must move into the home within 12 months of settlement and live there for 12 continuous months.
Buying with Others: You can buy with an ineligible person (e.g., a parent), provided eligible buyers acquire at least 50% of the property. However, this rule does not apply if the ineligible buyer is your spouse.
Scheme 2: First Home Guarantee (FHBG)
Let's be honest, saving 20% for a deposit in Sydney is tough.
In the past, this has meant that most were forced to buy a property with less than a 20% deposit, which typically required you to pay "Lenders Mortgage Insurance" (LMI). LMI is a fee (often in the tens of thousands) that protects the bank (not you) if you default.
Under this scheme, the Federal Government acts as your guarantor for the shortfall between your deposit and 20% (up to 15%).
The Benefit:
You can buy with just a 5% deposit (or 2% for eligible single parents) without paying Lenders Mortgage Insurance (LMI). The government guarantees the remaining 15% shortfall to the bank.
New 2026 Rules:
No Place Limits: There is no longer a cap on the number of places available per year.
No Income Caps: Previous income limits have been removed.
Property Price Caps (NSW):
Sydney & Regional Centres (Newcastle, Illawarra, Lake Macquarie): $1,500,000.
Rest of NSW: $800,000.
Eligibility Criteria:
Ownership History: You and your spouse/partner must never have owned property in Australia in the last 10 years.
Residency: You must move into the home within 6 months of settlement and live there during the guarantee period.
Scheme 3: Help to Buy
Launched in December 2025, this scheme allows you to partner with the Government to buy your home.
This boosts your borrowing power because your mortgage is much smaller. You don't pay rent or interest on the Government's share.
The Benefit:
The Government contributes up to 40% (for new homes) or 30% (for existing homes) of the purchase price.
How it works:
The Government holds a share of your property. You do not pay rent or interest on their share. You can buy them out over time.
Eligibility Criteria:
Income Caps: $100k for singles, $160k for couples (indexed annually).
Residency: You must move into the home and live there while the government continues to hold a share in the property. You cannot move out or rent it out (even if you get a job overseas).
Deposit: Minimum 2% required.
Interaction: You cannot use this with the 5% Deposit Scheme.
Things to consider:
The Government owns a percentage of your home. When you sell, you must pay them their percentage of the sale price (including any capital gains).
As the Government shares in capital gains, you need to think carefully before renovating because if you spend $100k renovating and increase the property value, the Government will own 30% (or 40%) of that new value.
You must maintain the property and hold building insurance.
If your income exceeds the cap ($100k/$160k) for two consecutive years, you may be required to start buying back the Government's share early.
There are a limited number of Participating Lenders for the scheme. This may mean you are required to pay a higher interest rate than what could otherwise have been available.
Scheme 4: First Home Owner Grant (FHOG)
Additional help is also available if you are buying or building a new home, by way of a $10,000 lump sum payment.
The Benefit:
A $10,000 grant paid at settlement.
Strict Property Rules:
Available for New Homes or Building a Home only. It is not available for established (existing) homes.
Price Caps:
Purchase of a new home: Price must not exceed $600,000.
Building a home (Land + Contract): Total cost must not exceed $750,000.
Residency:
Like FHBAS, you must move in within 12 months and live there for 12 continuous months.
Case studies
The following are examples only. All figures are based on January 2026 rates and conditions.
Scenario A: Buying an Established Apartment for $800,000
Stamp Duty | Under the First Home Buyers Assistance Scheme (FHBAS), you pay $0 Stamp Duty (Saving approximately $30,412). |
Deposit | If using the 5% Deposit Scheme, you only need $40,000 deposit (plus costs) and pay $0 LMI. Saving approximately $30,000 in LMI fees that would otherwise be payable. |
Grant: | You get $0 First Home Owner's Grant (FHOG), because it is not a new home. |
Total Benefit | Potentially over $60,000 in savings from stamp duty and LMI |
Scenario B: Buying a Brand New House and Land for $600,000
Stamp Duty | You pay $0 Stamp Duty (Saving approximately $21,412). |
Deposit | If using the 5% Deposit Scheme, you only need $30,000 deposit (plus costs) and pay $0 LMI. Saving over $16,000 in LMI fees that would otherwise be payable. |
Grant | You receive the $10,000 First Home Owner Grant. |
Total Benefit | Potentially over $47,000 in benefits and savings from the grant, stamp duty and LMI. |
Ready to start your journey?
Book a free consultation with Orca Home Loans today.
FREQUENTLY ASKED QUESTIONS
1. Can I combine the NSW Stamp Duty Exemption with the Federal 5% Deposit Scheme?
YES. These schemes are designed to work together. You can use the Federal 5% Deposit Scheme to solve your "Deposit" hurdle and the NSW FHBAS to solve your "Upfront Costs" hurdle.
2. I owned a home 12 years ago. Am I eligible? It depends on the scheme.
For NSW Stamp Duty (FHBAS): NO. You and your spouse must never have owned residential property in Australia previously.
For the Federal 5% Deposit Scheme: YES. You are eligible if you have not owned a property in Australia in the last 10 years.
3. Can I buy with my parents (who are not first home buyers) and still get the Stamp Duty Exemption?
YES (Partially). You can buy with ineligible people (like your parents), provided the eligible first home buyers acquire at least 50% of the property. However, the parents must pay stamp duty on their share. Note: This exception does not apply if the ineligible person is your spouse.
4. Can I use the "Help to Buy" scheme AND the "5% Deposit Scheme" together?
NO. You generally cannot stack the Help to Buy (Shared Equity) scheme with other government guarantees. You must choose one pathway. However, you can still claim the NSW Stamp Duty exemptions while using Help to Buy.
5. Does an "Off-the-Plan" apartment count as a "New Home" for the $10,000 Grant?
YES. The Grant applies to "New Homes," which includes newly built homes, off-the-plan purchases, and "substantially renovated" homes.
6. Do I really have to live in the property? What if I want to rent it out later?
Strict residency rules apply.
NSW Schemes: You must move in within 12 months and live there for 12 continuous months.
Federal 5% Deposit: The property must remain your owner-occupied home. Turning it into an investment property while the guarantee is active is generally not allowed.
Help to Buy: You must live in the home as your principal place of residence. If you move out or rent the property, you may be required to buy out the Government's share.
7. What happens if my income increases above the "Help to Buy" caps after I buy?
If your income exceeds the caps (currently $100k/$160k) for two consecutive years, you may be required to start buying back the Government's share.
8. Can I rent out one of the rooms to help pay the mortgage?
Generally, YES, but you must still live there. Most schemes require the home to be your "Principal Place of Residence." Having a flatmate or boarder is usually allowed, provided you are still living in the property full-time. You cannot rent out the entire property (even for a short period) or turn it into a full-time business (like Airbnb), as this breaches the "owner-occupier" rules.
Please note: Information is current as of January 2026. Please note that government schemes are rule-based and subject to change, including annual indexation of price caps and duty thresholds. This guide is for general information only and does not constitute personalized financial or legal advice. We strongly recommend confirming your specific eligibility before proceeding.
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