What is the price cap for first home buyer stamp duty exemption in NSW?
In NSW, first home buyers pay no stamp duty on properties purchased for $800,000 or less, and receive a concessional rate on properties between $800,001 and $1,000,000 under the First Home Buyer Assistance Scheme. Above $1,000,000, no concession applies and full stamp duty is payable. These thresholds apply to both new and existing homes.
The Fuller Picture
The stamp duty exemption and concession thresholds in NSW are set under the First Home Buyer Assistance Scheme (FHBAS). A first home buyer purchasing a home for $800,000 or less pays no stamp duty at all — a saving that can be worth tens of thousands of dollars. For properties priced between $800,001 and $1,000,000, duty is reduced on a sliding scale, with the concession tapering off as the price approaches the $1 million ceiling.
These thresholds apply to the purchase price of the property, not the land value or any assessed value. If the price is $800,001, you don't lose the full exemption — you move into the concessional band, which still provides meaningful savings. At $999,999, the concession is small but still present. At $1,000,001 or above, it disappears entirely and full duty applies.
The scheme covers both existing homes and new builds. There is no separate higher threshold for new builds under the FHBAS; the price cap applies equally to both. If you are purchasing a vacant block of land with the intent to build, the eligibility conditions may differ, so it's worth checking current Revenue NSW guidance directly before you proceed.
What This Means for Your Purchase
For buyers in the Illawarra, the $800,000 threshold is a number worth planning around. Many entry-level homes in suburbs like Dapto, Unanderra, Albion Park, and parts of the Shellharbour LGA sit in the $700,000–$850,000 range, making stamp duty eligibility a genuine factor in purchase decisions rather than an afterthought.
The practical financial implication is significant: on a property at $800,000, a first home buyer pays no stamp duty — a saving of roughly $30,000 compared to a standard purchaser paying the full rate. Even in the concessional band between $800,001 and $1,000,000, the partial savings can still run to several thousand dollars. Understanding this can shape how you negotiate, particularly when a vendor and buyer are close to the threshold.
Stamp duty is due at settlement, not at exchange. This means it needs to be available as cash at the time the transaction completes — you cannot normally borrow it as part of your home loan. Factor this into your total funds to complete, and make sure your conveyancer confirms your eligibility before contracts are exchanged.
How This Shows Up in the Illawarra
In the Illawarra, the $800,000 mark sits in the heart of the market for established homes in middle and outer ring suburbs. First home buyers competing in places like Warrawong, Lake Heights, Kanahooka, and Oak Flats will often find properties priced right around this threshold. The difference between a purchase price of $795,000 and $810,000 isn't just $15,000 — it can also carry a meaningful shift in stamp duty liability. That makes the threshold a useful lever to understand going into any negotiation.
Buyers targeting northern suburbs like Fairy Meadow, Thirroul, or Corrimal, or looking at beachside properties across the region, are more commonly operating in the $950,000–$1,300,000 range. At those prices, the concession is either small or absent entirely. Knowing this in advance helps you set realistic expectations about what costs you'll face at settlement and how much cash you need beyond the deposit itself.
Frequently Asked Questions
Does the $800,000 threshold apply to new homes as well as existing ones?
Yes. The FHBAS threshold applies equally to new and existing homes. New builds don't get a higher stamp duty cap under this scheme, though other grants such as the First Home Owner Grant have their own separate eligibility rules.
If the purchase price is $800,001, do I lose the full exemption?
No. At $800,001 you move into the concessional band rather than forfeiting the exemption entirely. The concession reduces gradually as the price climbs toward $1,000,000, but it doesn't disappear until you cross that ceiling.
Can I claim the exemption if one of the buyers on the contract has owned property before?
No. If any buyer named on the contract has previously owned residential property in Australia, the FHBAS does not apply. All buyers on the contract must be eligible first home buyers.
When is stamp duty actually paid?
Stamp duty is typically paid at settlement, not at exchange. Your conveyancer or solicitor handles this as part of finalising the transaction. You need the funds available at that point, as stamp duty cannot normally be included in the home loan itself.
If I win an auction at $850,000, can I still get a concession?
Yes. A price of $850,000 sits in the concessional band, so you'll pay a reduced rate rather than the full amount. The concession is partial at that price but still meaningful. At $1,000,001 or above, no concession applies.
Can a buyers agent help me use the stamp duty threshold as a negotiating tool?
Yes. A buyers agent familiar with the Illawarra market can help you identify realistic opportunities below $800,000 and can assist with negotiation when price and stamp duty savings are closely connected.
If you're working out how stamp duty fits into your budget as a first home buyer, we're happy to walk through the numbers with you. Reach out and we can talk through what to factor in before you make an offer.
