The suburbs priced out of first home buyer benefits

The number of first home buyers able to access stamp duty exemptions is steadily falling as the NSW government faces pressure to increase caps to meet the reality of Sydney’s rising house prices.

According to analysis from Domain, Sydney’s median house price hit $1.7 million at the end of 2025. It is predicted to hit $1.9 million by the end of 2026.

To qualify for a full stamp duty exemption under the state’s first home buyer scheme, a property must be worth no more than $800,000. Properties worth less than $1 million qualify for a partial exemption.

The number of exemptions granted across the state decreased by 6 per cent, from 35,036 in the 2023-24 financial year to 32,777 in 2024-25. Eight months into the current financial year, only 18,874 exemptions had been granted.

In western Sydney, the number of exemptions decreased by 16 per cent, from 13,386 in 2023-24 to 11,138 in 2024-25.

Western Sydney remains a hotspot for take-up of the scheme. Nine of the 10 top suburbs using the scheme are located in the region. The scheme has been most popular in Westmead, Liverpool, Campbelltown and Parramatta.

In Sydney’s eastern suburbs, the number of buyers accessing the exemption decreased by 10 per cent, from 476 in 2023-24 to 389 in 2024-25. Sutherland Shire exemptions dropped by 9 per cent, from 632 to 572.

The average value of savings for first homebuyers accessing the scheme has fallen as property prices rise outside the full exemption threshold. On the Central Coast, the average eligible homebuyer is saving $20,931 this year, down from $22,282 in 2023/24.

Monthly averages show the downward trend is likely to continue this financial year.

It’s a different story in some regional areas: in the Hunter Valley, the Central West and on the Mid North Coast, take-up of the scheme is increasing.

The state government is facing pressure from the opposition to increase the thresholds and capture more first homebuyers struggling to afford Sydney’s rising house prices.

While the Liberals haven’t committed to a specific threshold they would introduce, opposition finance spokeswoman Monica Tudehope said the incentives would be greater than those available today.

“When your typical new home in Oran Park is now over a million dollars, this scheme is clearly not helping first home buyers in Sydney’s west,” Tudehope said.

Under questioning from Liberal shadow treasurer Scott Farlow at a budget estimates hearing, Finance Minister Courtney Houssos said the government was looking at potential changes to the scheme.

“We’ll keep a close eye on the scheme to make sure if we need to make improvements, we’ll consider those in the future,” she said.

Stamp duty is a major revenue raiser for the state government and, as property prices soar in Sydney, the tax is propping up an increase in the government’s tax revenue.

Treasury’s half-yearly budget review found stamp duty revenue was projected to increase by $2.4 million over the four years to 2028-29, driven by “stronger than expected residential property prices”.

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