When you buy your first home on or after 1 July 2017, you may be eligible for an exemption or concession from duty.
If you entered into a contract to buy your first home before 1 July 2017, you may be eligible for the first home buyer duty reduction.
Exemption or concession
The first home buyer duty exemption or concession may be available if:
• You enter into a contract of sale to buy your first home on or after 1 July 2017.
• Your home has a dutiable value of:
$600,000 or less to receive the first home buyer duty exemption,
$600,001 to $750,000 to receive the first home buyer duty concession.
• All the purchasers of the property meet the First Home Owner Grant eligibility criteria, and
at least one purchaser satisfies the residency requirement.
Unlike the First Home Owner Grant, it doesn’t matter whether you buy a new or established home.
The dutiable value is usually the contract price. If you buy your home off-the-plan, the dutiable value is determined after applying any off-the-plan concession. This means it will probably be less than the contract price.
If you are buying a property with a foreign purchaser, special rules may apply.
Contract date from 1 July 2017
To be eligible for the first home buyer duty exemption or concession, your contract of sale must have been entered into on or after 1 July 2017.
You are not eligible for the concession or exemption if:
• The contract was entered into before 1 July 2017 but the property settled after this date.
• You are nominated as a purchaser on or after 1 July 2017 on a contract signed before this date.
• You signed a contract to buy vacant land before 1 July 2017 and will build your new home within 12 months of settlement after 1 July 2017.
In these circumstances, you may be eligible to receive the first-home buyer duty reduction instead.
Are you eligible for the exemption or concession?
All purchasers and their partners must satisfy the eligibility criteria for the First Home Owner Grant except:
• Your home does not have to be a new home.
• Your contract price can be more than $750,000 (remember, it is the dutiable value that is important).
This means the exemption or concession is available even if you are buying an established or existing home and/or if your contract price is over $750,000. However, your home needs to meet the dutiable value requirements.
Living in your home
You must live in your property as your principal place of residence for a continuous period of 12 months, commencing within 12 months of settlement, to maintain your eligibility for the duty exemption or concession. In limited circumstances, we may vary this requirement.
If you buy the property with someone else, at least one of you must satisfy this residency requirement.
If a change in your circumstances means the residence requirement may not be satisfied, you must notify us in writing within 30 days of becoming aware of those circumstances.
Australian Defence Force personnel
The residence requirement does not apply to member of the Australian Defence Force and your home is transferred to you on or after 1 July 2018.
You must be a current member of the Australian Army, Air Force or Navy and be enrolled to vote in Victorian elections. If you are buying your home with another person who is not a member of the Australian Defence Force, they must be enrolled to vote in Victorian elections.
The exemption does not apply to Australian Army, Air Force or Navy reservists or to Australian Public Service staff.
How much is the concession worth?
The concession applies on a sliding scale. The closer the dutiable value is to $600,001, the greater the concession.
Vacant land contracts
The first home buyer duty exemption or concession may apply if you have bought vacant land on which you will build your first home. To be eligible you need to:
• Have entered into your contract to buy the vacant land on or after 1 July 2017.
• Entered into a contract to build your home on the land within 12 months of getting possession of the property.
• Complete and move into your completed home within 12 months of settlement on your contract to buy the vacant land.
For the purposes of assessing your eligibility for this exemption or concession, we only consider the value of the vacant land. We do not include the value of your building contract.
If you are a first home buyer who entered into a contract to purchase a home before 1 July 2017 (or are the substitute purchaser under such a contract), you may be eligible to receive the duty reduction of 50 per cent if:
• Your settlement date was on or after 1 September 2014.
• The contract price is $750,000 or less.
• The dutiable value of $600,000 or less. Dutiable value may be less than contract price in some circumstances, for example where you are entitled to an off-the-plan concession.
All purchasers must also meet the First Home Owner Grant eligibility criteria and satisfy the residency requirement outlined in the earlier Living in your home section. If you buy the property with someone else, at least one of you must use the property as their home and satisfy the residence requirement.
Like the first home buyer duty exemption and concession, it is available for both new and established homes.
In most cases, the dutiable value of a property is the contract price you pay for it.
However, if the price you pay for the property is less than market value, the dutiable value will be the market value.
If you bought your property off-the-plan and are eligible for the off-the-plan concession, the dutiable value of your property is the contract price less the costs of construction or refurbishment occurring on or after the contract date. This amount is calculated using information provided by, and a method chosen by, the vendor.
About six months before the settlement of your property, your vendor will advise your conveyancer or solicitor of the dutiable value of your property, after applying the off-the-plan concession. You can then contact your conveyancer or solicitor to get this value if you want to estimate the duty on your property.
To be eligible for the first home buyer duty concession or exemption (available on or after 1 July 2017), the dutiable value of your property must be $750,000 or less.
To be eligible for the first home buyer duty reduction (available before 1 July 2017), your contract price must be $750,000 or less and the dutiable value of your property must be $600,000 or less.
More about the off-the-plan concession
What if I am a pensioner?
Eligible Commonwealth concession card holders may be eligible for an exemption or concession from duty when they purchase a home. These are identified concession cards issued by the Department of Human Services (DHS) or the Department of Veterans’ Affairs (DVA).
The pensioner duty exemption or concession is a once-only:
• Exemption from duty when you buy a home valued at $330,000 or less.
• Concession from duty when you buy a home valued from $330,001 to $750,000.
More about the pensioner duty exemption or concession
You may qualify for both the pensioner benefit and the first home buyer benefit, but you cannot receive both in respect of the same transaction. You must choose one or the other.
Which one should I choose?
If you are eligible for both benefits, you can use our calculators to compare the duty you will pay, if any, after receiving the benefit of each:
• Calculate how much duty you pay as a first home buyer.
• Calculate how much duty you pay as an eligible pensioner purchasing a home.
Remember, first home buyer duty benefits are only available when you buy your first home. They are not available on subsequent home purchases.
The pensioner exemption or concession is available to you only once, but the home you buy does not have to be your first home. It may be available for a subsequent home purchase.
Duty reductions from 2011 to 2014
Reductions in duty, ranging from 20 to 40 per cent, were available for transactions between 1 July 2011 and 1 September 2014 for eligible first home buyers.
If you settled on your property on or after 1 July 2011 and before 1 September 2014 and did not receive a duty reduction, you may be entitled to a duty refund. You can apply for the refund up to five years after the date the duty was paid.
Sourced from State Revenue Office, Victoria on 22nd January 2019