In short
In 2026–27 first-home buyers pay no stamp duty up to $800,000 in NSW, $600,000 in Victoria and $700,000 for established homes in Queensland (new homes exempt at any price), with concessions phasing out above. A $750,000 NSW purchase with a $75,000 deposit therefore pays $0 duty instead of $27,938, but at 90% LVR attracts about $16,186 of LMI unless the buyer uses the Home Guarantee Scheme; the $675,000 loan is assessed at the rate plus 3 points, needing about $5,378 a month of surplus at 8.89%, and the First Home Super Saver scheme can release up to $50,000 of super per person for the deposit.
A first home in Australia comes down to four numbers: your deposit, the stamp duty the state charges, the lenders mortgage insurance due if the deposit is under 20%, and the loan a bank will approve once it adds a 3-percentage-point buffer to the rate. First-home concessions change each of them. This guide sets out the stamp duty concessions in NSW, Victoria and Queensland, the First Home Super Saver scheme, how LMI is priced and avoided, how borrowing power is assessed and where the Home Guarantee Scheme fits, then works through a $750,000 purchase in NSW with a $75,000 deposit.
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Stamp duty concessions in NSW, Victoria and Queensland
Transfer duty is charged by the state on the purchase price (or market value if higher) on a sliding scale, and is paid at settlement, or within three months of exchange in NSW. First-home buyers who move in within 12 months get a full exemption up to a threshold and a concession that phases out above it.
| State (2026–27) | Full exemption up to | Concession phases out to | Notes |
|---|---|---|---|
| NSW (First Home Buyers Assistance) | $800,000 | $1,000,000 | Vacant land $350,000 / $450,000; general scale 1.25% to 5.5% above $1.29 million, bands indexed each 1 July |
| Victoria | $600,000 | $750,000 | General scale 1.4% to 6%, flat 5.5% between $960,000 and $2 million |
| Queensland, established home | $700,000 | $800,000 | All owner-occupiers pay only 1% on the first $350,000 (home concession) |
| Queensland, new home | Any price | n/a | No duty for first-home buyers on new homes from 1 May 2025 |
In the phase-out zone the concession is pro-rated: in NSW, duty = general duty × (price − $800,000) ÷ $200,000, so a $900,000 home pays half the general $34,688, which is $17,344. Foreign purchasers pay a surcharge of 9% in NSW and 8% in Victoria and Queensland on the full price, with no concession. Duty cannot be added to the mortgage, so it comes out of the deposit.
First Home Super Saver scheme
FHSS lets you make voluntary super contributions, usually by salary sacrifice, of up to $15,000 a year and $50,000 in total per person, then release them with deemed earnings for a deposit. Salary-sacrificed contributions are taxed at 15% on the way in instead of your marginal rate, and the released amount is taxed at your marginal rate less a 30% offset, so a 30% bracket earner (32% with Medicare) pays 2% on the way out. Employer super guarantee contributions cannot be released, and voluntary contributions count towards the $32,500 concessional cap. On a $95,000 salary, three years of $15,000 produce about $43,150 of deposit against about $32,500 from saving the same pay after tax. You must request an FHSS determination from the ATO before signing a contract, and a partner can release a further $50,000 plus earnings for the same home. The First Home Super Saver calculator runs the comparison for your salary.
Lenders mortgage insurance and how to avoid it
LMI applies whenever the loan is more than 80% of the value. It protects the lender, not you, and is priced as a percentage of the loan that climbs with the loan-to-value ratio: typically about 1.2% at 80–85% LVR, 2.2% at 85–90% and 4% at 90–95%, plus 9% stamp duty on the premium. Most borrowers capitalise it onto the loan, which raises the LVR again and adds interest for the full term. Four ways round it: a 20% deposit; the federal Home Guarantee Scheme, under which the government guarantees up to 15% of the loan so a first-home buyer with 5% pays no LMI (places are limited and city price caps apply); professional waivers for doctors, lawyers and accountants to 90% LVR; or a family guarantor covering the deposit gap. The LMI calculator estimates the premium and its lifetime cost.
Borrowing power and the 3% buffer
Lenders start from net income after 2026–27 tax, Medicare and the low income tax offset, add 80% of any rent, and subtract living expenses (never less than the HEM benchmark for your household), other loan repayments and 3.8% a month of every credit card limit, used or not. The surplus must cover the repayment at the loan rate plus 3 percentage points, the APRA serviceability buffer in force since November 2021, so a 5.89% loan is assessed at 8.89%. Most lenders also cap total debt around six times gross income. HELP repayments are counted as a commitment, and bonus or overtime income is shaded. The borrowing power calculator applies the same rules.
Worked example: $750,000 in NSW with a $75,000 deposit
Stamp duty. General NSW duty on $750,000: 1.25% × $18,000 = $225; 1.5% × $20,000 = $300; 1.75% × $65,000 = $1,137.50; 3.5% × $284,000 = $9,940; 4.5% × $363,000 = $16,335; total $27,937.50. The price is under the $800,000 First Home Buyers Assistance threshold, so a first-home buyer who moves in within 12 months pays $0. The same home would attract $40,070 in Victoria (the concession has fully phased out at $750,000), $19,600 for an owner-occupier in Queensland and $9,800 for a Queensland first-home buyer of an established home.
LMI. Loan $750,000 − $75,000 = $675,000, LVR 90%. Premium about 2.2% × $675,000 = $14,850, plus 9% duty = $16,186. Capitalised, the loan becomes $691,186 and the repayment at 5.89% over 30 years rises from $3,999 to $4,095 a month, about $96 extra and roughly $34,500 over the term. Under the Home Guarantee Scheme the premium is nil. Avoiding it with a 20% deposit would need $150,000, or limit the price to $375,000 with the $75,000 in hand.
Borrowing power. A couple on $95,000 and $65,000 pays $20,920 and $11,295 of tax, Medicare and offset, leaving about $10,649 a month. With $3,800 of living expenses and no other debts the surplus is $6,849, which at the 8.89% assessment rate supports about $860,000 over 30 years (5.4 times income), comfortably above the $675,000 needed; the $675,000 loan requires a surplus of $5,378 a month at the buffered rate even though the actual repayment is $3,999.
Cash at settlement: $75,000 deposit, $0 duty, LMI capitalised or avoided, plus transfer fees and conveyancing. Check the repayment with the home loan repayment calculator.
Home Guarantee Scheme
The scheme is a government guarantee, not a grant: Housing Australia guarantees the part of the loan above 80% LVR, up to 15%, so a participating lender can approve a first-home buyer with a 5% deposit without LMI. On the example above that saves the whole $16,186 premium and its interest. Places are limited and price caps vary by city, so confirm eligibility before exchanging. It stacks with the state duty concessions and FHSS on the one purchase.
Common mistakes
- Budgeting the deposit without duty and costs. Above the concession limits duty is tens of thousands and it cannot be borrowed; the $75,000 must cover it as well as the deposit.
- Leaving credit card limits open. A $20,000 unused limit is treated as about $760 a month of commitment and removes roughly $75,000 of borrowing power at current rates.
- Buying one dollar over the threshold. At $800,001 in NSW the exemption becomes a concession; at $1,000,001 it is gone. In Victoria the concession has already fully phased out at $750,000.
- Signing before the FHSS determination. The ATO determination must be requested before the contract; released funds take 15 to 25 business days.
Frequently asked questions
Do first-home buyers pay stamp duty in 2026–27?
Not up to $800,000 in NSW, $600,000 in Victoria or $700,000 for an established home in Queensland, with concessions phasing out above those figures; Queensland first-home buyers of new homes pay none at any price.
How much is LMI on a 10% deposit?
Typically about 2.2% of the loan plus 9% duty on the premium, around $16,000 on a $675,000 loan. It is nil under the Home Guarantee Scheme or with a 20% deposit.
What is the 3% buffer?
APRA requires lenders to test that you could still afford repayments if your rate rose by 3 percentage points. It applies to new loans and most refinances.
Can both partners use the First Home Super Saver scheme?
Yes. Each eligible first-home buyer can release up to $50,000 of voluntary contributions plus earnings towards the same property.
Can stamp duty be added to the mortgage?
No. Lenders lend against the property value, so duty must come from your own funds unless the LVR has room, and it cannot be paid in instalments.
Sources
- Revenue NSW — Transfer duty and First Home Buyers Assistance; SRO Victoria — Land transfer duty; Queensland Revenue Office — Transfer duty (checked 27 October 2026)
- ATO — First Home Super Saver scheme and contributions caps (checked 10 October 2026)
- Housing Australia — Home Guarantee Scheme; Moneysmart — lenders mortgage insurance; insurer rate guides (Helia, QBE) for typical premium bands (checked 27 October 2026)
- APRA — APG 223 serviceability buffer; ATO — 2026–27 resident tax rates (checked 27 October 2026)