Victorian stamp duty for first home buyers

Why this matters more than the grant

The First Home Owner Grant gets more attention. The duty exemption is usually worth considerably more.

On a $600,000 purchase, the general rate of duty runs to well over $30,000. A full exemption removes all of it. The grant, where it applies, is $10,000.

Both are worth having. But if you are prioritising which threshold to plan around, duty is the one that moves the number.

How the relief works

Victoria offers eligible first home buyers, for a principal place of residence:

• A full exemption from duty at or below a threshold value
• A sliding concession between that threshold and a second, higher one
• The general rate above that

At the time of writing, the exemption applies up to $600,000, and the concession phases out at $750,000.

Confirm the current thresholds with the State Revenue Office before you rely on them. They change at budget time, and a figure repeated from an old article is one of the most common sources of a broken budget.

There is no cliff

Worth stating plainly, because people worry about it: the concession phases in gradually.

Buying at $601,000 does not suddenly attract the full duty bill. The relief reduces proportionately as value rises toward $750,000. You can see the shape of it on the stamp duty calculator by moving the value slider between the two thresholds.

That matters when you are negotiating. A property listed just above $600,000 is not the disaster it might feel like.

What “principal place of residence” requires

The relief is for people buying a home to live in. Victoria attaches residence requirements — you must actually move in, within a set period, and live there for a minimum time.

Buying a first property as an investment does not qualify, even if it is genuinely your first property. If you intend to rent it out initially and move in later, get advice specific to your situation before you sign, because the sequencing matters.

The two-part contract point

This is the most valuable thing in this guide for anyone buying in Melbourne’s north, and it is routinely not explained at the display suite.

Duty on a land transfer is generally assessed on the value being transferred.

Where a house and land package is structured as two contracts — one for the land, one for the build — duty is generally calculated on the land value alone, not the completed house and land total.

Where it is a single contract for a finished home, duty is generally assessed on the whole amount.

On a package where land is a fraction of the total price, that is a very large difference. Combined with the first home buyer relief, buyers in Mickleham, Kalkallo, Donnybrook and Wollert frequently end up paying no duty at all on purchases that would attract substantial duty as an established home.

The treatment depends on how the contracts are actually drawn and on your circumstances, and the State Revenue Office sets the rules. It is worth understanding what you are signing before you sign, and getting proper advice on the structure.

This is the point where a conversation pays for itself. Two-part contracts are where the largest duty differences on a house-and-land purchase are won or lost. Book a free chat.

The First Home Owner Grant, briefly

A grant of $10,000 is available for first home buyers purchasing or building a new home in Victoria, subject to a value cap. It does not apply to established homes.

That distinction is disproportionately relevant here. Most of what is being built across the northern growth corridor is new — so a large share of first home buyers in this area qualify where a buyer of an established home elsewhere would not.

Timing matters: the grant is generally paid at settlement rather than beforehand, so it usually cannot form part of the deposit you pay on signing. It reduces what you need to bring to settlement.

What is not covered here

Several things affect duty that this guide deliberately does not attempt to quantify:

• The principal place of residence concession for values between $130,000 and $550,000, which is separate from first home buyer relief
• Off-the-plan concessions, which have their own rules
• Pensioner concessions
• Foreign purchaser additional duty, which applies on top of ordinary duty
• Federal guarantee schemes, which affect your deposit rather than your duty

Each has its own eligibility criteria and each changes.

Before you budget

1. Check the current thresholds at the State Revenue Office — not a blog, including this one
2. Work out whether the property qualifies as your principal place of residence
3. Understand the contract structure if you are buying house and land
4. Run the numbers on the stamp duty calculator, then treat the result as indicative
5. Get advice on the specifics before signing, not after

The figures in this guide were accurate when written and are dated above. Duty thresholds are exactly the kind of thing that moves quietly — if this page is more than six months old, verify before you rely on it.