Buying property in NSW: the steps, the costs and the rules
Buying a home in NSW follows a fairly standard path, but a few moments carry real risk: exchanging contracts before your finance is ready, assuming you have a cooling-off period at auction, and forgetting the costs on top of the deposit. Here is the process in order.
Step 1: Work out your budget and upfront costs
The deposit is only part of the cash you need. Allow for:
- Stamp duty, unless you qualify for an exemption or concession.
- Lenders Mortgage Insurance, usually if your deposit is under 20%.
- Conveyancing or legal fees.
- Building and pest inspections, plus a strata report for apartments.
- Mortgage and title registration fees, and moving costs.
Step 2: Check the first home buyer schemes
If this is your first home, three schemes may apply, and they can sometimes be combined. Each has its own rules and limits.
- First Home Buyers Assistance Scheme: no transfer duty on eligible homes up to $800,000, and a concession up to $1,000,000.
- First Home Owner Grant: $10,000 for eligible new homes up to $600,000, or land and building up to $750,000.
- Australian Government 5% Deposit Scheme: buy with as little as 5% deposit and no LMI, within the price caps.
Step 3: Get pre-approval
Pre-approval shows sellers you are serious and tells you your likely limit, but it is not a promise to lend. The lender still has to assess the specific property, so your finance is not final just because you are pre-approved.
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Step 4: Find the property and do your checks
- Have a conveyancer or solicitor review the contract before you commit.
- Get building and pest inspections, and read the strata report for an apartment.
- Ask your broker whether the lender has limits on that property type, such as small apartments.
Step 5: Exchange contracts and the cooling-off period
The sale becomes binding when contracts are exchanged. You usually pay a deposit, commonly 10% unless a lower amount is agreed.
Residential buyers in NSW generally have a cooling-off period until 5pm on the fifth business day after exchange. If you withdraw during that time, you pay the seller 0.25% of the purchase price.
There is no cooling-off period if you buy at auction, or exchange on auction day after the property is passed in. A 66W certificate from your solicitor or conveyancer also waives it. Make sure your finance and checks are done before you bid or sign.
Step 6: Finish your loan and settle
- Send the contract to your broker straight away so the lender can value the property and move to formal approval.
- Sign your loan documents and arrange building insurance if your lender or contract requires it.
- Pay transfer duty if it applies. It is generally due within 3 months of signing the contract, or at settlement if earlier.
- Do a final inspection shortly before settlement. Your conveyancer and lender then complete the transfer, and you receive the keys.
Settlement timing is set in your contract, so check the date and how long your lender needs before you agree to it.
Buying to invest?
The steps are similar, but loan structure and tenants come into play, and first home buyer schemes generally do not apply. If you arrange your investment loan through us, new clients can receive up to 12 months of free property management. Conditions apply.
Frequently asked questions
How much deposit do I need to buy in NSW?
Lenders commonly look for 20% to avoid LMI. Some buyers can purchase with less, including eligible first home buyers using the 5% Deposit Scheme. You also need money for the upfront costs.
Can I back out after exchanging contracts in NSW?
Usually during the cooling-off period, by paying 0.25% of the purchase price. There is no cooling-off at auction or where it has been waived. After it ends, withdrawing can have serious consequences, so get legal advice.
When do I pay stamp duty in NSW?
Transfer duty is generally due within 3 months of signing the contract, or earlier if settlement comes first. Some buyers qualify for exemptions, concessions or a deferral on off-the-plan homes.
Do I need a conveyancer or a solicitor?
Either can handle a standard purchase in NSW. Use someone experienced with your property type, and have them review the contract before you exchange.
Helpful tools & guides
This article is general information only and does not take into account your objectives, financial situation or needs. It is not legal advice. Government schemes and lender criteria change and have eligibility rules. All loans are subject to lender approval. Sources: NSW Government and Revenue NSW, accessed November 2026.