Do First Home Buyers Pay Stamp Duty in Victoria? A Guide to Stamp Duty Concessions in Victoria

As a first-home buyer in Victoria, navigating the property market can feel overwhelming, especially when it comes to costs like stamp duty. But the good news is that there are stamp duty exemptions and concessions designed specifically to help first-home buyers get their foot in the door. Whether you’re looking to buy an established property, a new home, or even vacant land to build your first home, understanding these concessions can make a significant difference in your budget.

Full Exemption for Properties Up to $600,000

One of the most attractive benefits available to first-home buyers in Victoria is the stamp duty exemption. If you’re purchasing a new or existing property with a value of up to $600,000, you’re eligible for a full exemption. This means you won’t need to pay any stamp duty, which could save you tens of thousands of dollars.

For example, if you purchase a home for $600,000, you would typically be required to pay a considerable stamp duty fee. However, as a first-home buyer, you could avoid this cost entirely, giving you more financial freedom to focus on other aspects of your new home, such as furnishing or renovations.

Concessions for Properties Between $600,000 and $750,000

If the property you’re interested in is valued between $600,000 and $750,000, you may still be eligible for a partial concession on stamp duty. This concession operates on a sliding scale—the closer your property’s value is to $600,000, the larger your discount on the stamp duty. Conversely, the closer you get to $750,000, the smaller the concession will be.

For example, if you’re purchasing a property valued at $630,000, the stamp duty without any concession would be approximately $32,870. However, with the first-home buyer concession, the stamp duty is reduced to just $6,574. This is a saving of over $26,000, which can significantly ease the financial burden of buying your first home.

However, it’s important to note that once the property’s value exceeds $750,000, no concessions are available. At this point, you would be required to pay the full stamp duty amount applicable to all buyers in Victoria, regardless of first-home buyer status.

Buying Vacant Land? You May Still Qualify for Concessions

If your plan is to purchase vacant land and build your first home, you could still qualify for either the full exemption or a concession, depending on the value of the land. The key difference when buying vacant land is that only the value of the land itself is considered for assessing eligibility for stamp duty concessions, not the total cost of the land plus your building contract.

To be eligible for the first-home buyer stamp duty exemption or concession in this scenario, you must begin living in your new home by one of the following dates, whichever comes first:

• Within 12 months of the date you can lawfully live in the home, which is usually when the occupancy certificate is issued.
• Within 36 months of the settlement date on the land.

This flexibility ensures that if you’re building your home, you have enough time to complete construction while still qualifying for the available concessions.

Why You Should Take Advantage of These Concessions

Stamp duty is one of the most significant upfront costs when purchasing a property. By taking advantage of the exemptions and concessions available to first-home buyers in Victoria, you can drastically reduce your stamp duty expenses. This, in turn, means you’ll have a larger deposit available for your home purchase. A bigger deposit can open up more financial options, such as avoiding the added cost of Lenders Mortgage Insurance (LMI), which is typically required if your deposit is less than 20% of the property’s value. By minimising your upfront stamp duty costs, you can increase your deposit and potentially save thousands more in the long run by avoiding LMI and securing a better interest rate.

Eligibility Requirements for Stamp Duty Concessions

In addition to the value of the property or land, there are a few other criteria you need to meet to be eligible for the first-home buyer stamp duty exemption or concession:

• You must be an Australian citizen or permanent resident, or a New Zealand citizen holding a special category visa.
• The property must be your principal place of residence (PPR). You’ll need to move in and live in the home for at least 12 continuous months, starting within 12 months of the settlement or occupancy date.
• You must not have previously owned a residential property in Australia, including an investment property.

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Take the Next Step with UNO Brokers

Purchasing your first home is an exciting journey, but it’s important to have expert guidance to navigate the complexities of the process, especially when it comes to stamp duty concessions. If you’re considering buying your first home and want to explore how much you could save on stamp duty, speak with a uno mortgage broker today. Our experienced team can help you understand your eligibility, assess your options, and secure the best deal for your unique situation. Let us help you make the most of the opportunities available to first-home buyers in Victoria.

Reach out to UNO and start your home ownership journey with confidence!

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Source: State Revenue Office Victoria