NSW first home buyers can buy up to $750,000 under extended FHOG

The NSW government has extended the first home owner grant in its June 17 budget.

First-time buyers who purchase new properties - houses or apartments - worth up to $750,000 will now qualify for the $15,000 payment from July 1.

The previous threshold had been $650,000 since the June 2012 budget.

Sydney's runaway median dwelling price has moved from $541,000 as at June 2012 to sit currently at $678,500, according to RP Data, so the catchup decision barely keeps pace with actual price movements.

However Housing Industry Association chief economist Harley Dale said the median price for new homes in NSW was around $650,000 which means most first home buyers will be able to get the full benefit. 

The threshold decision also brings NSW into line with several other states and territories.

Treasurer Andrew Constance initially announced the extended eligibility criteria for the first home owner grant by $100,000 with Premier Mike Baird in a visit to Sydney's north west.

“This will make the dream for young families of owning their own home that bit easier,” Andrew Constance said.

The government claims 100,000 new homes have been built since the March 2011 election. But NSW first home buyers still remain at well below the long term average in their buying habits, in part due to the desire to shift their buying to new homes, and also given affordability issues.

Last year around 7600 home owners secured the $15,000 grant, compared with 36,000 in 2011, after the scheme was restricted to new homes. 

The First Home Owner Grant (New Homes) scheme was established in 2012 to assist eligible first home owners to purchase a new home or build their home by offering a $15,000 grant.

The take-up of the grant scheme has been greater in recent times - some 45 per cent higher in the four months to April compared with the same time in 2013.

The scheme applies to new homes only, houses or apartments, and is scheduled to be reduced to $10,000 on 1 January 2016.

In Victoria first home buyers qualify for the $10,000 First Home Bonus, but the value of the property must not exceed $750,000. Eligible recipients will also qualify for a reduction of up to 40% on stamp duty payable on first homes purchased below $600,000. 

Queensland's Great Start Grant valued at $15,000 is paid to first home buyers who are buying or building a new home valued up to $750,000.

The ACT offers first home buyers $12,500 when purchasing new, off the plan with the grant is capped at $750,000 purchases.

Last month Property Observer published a national guide for first home buyers.