So you’re thinking of buying your first home? An exciting move, and we’re here for you every step of the way with the latest info and tips. Yes, there’s some lingo to wrap your head around, but before long, you’ll be on top of stamp duty concessions, the FHOG and the HomeBuilder Grant.
If you’re buying or building a home for the first time in Victoria, you could be eligible for financial help from the state government, bringing your dream of getting into the property market that much closer.
Stamp duty is a government tax on certain purchases, including buying a home, land or investment property. The good news is, when you buy your first home and it’s in Victoria, you might be eligible for a stamp duty exemption (you pay no stamp duty) or concession (a discount on the stamp duty). The amount of the discount depends on the value of your home.
Victorian residents buying their first home valued at $750,000 or less, which can be a house, townhouse, apartment, unit or something similar. You can apply for a refund up to five years after the stamp duty was paid – if you overpaid stamp duty on your purchase because you didn’t claim an exemption, concession or reduction you were actually eligible for.
If you buy a first home valued up to $600,000, you can apply for a full exemption. Let’s say Matt buys his first home for $580,000. According to a Victorian stamp duty calculator, he’ll pay no stamp duty and save $29,870.
If you buy a first home valued at between $600,001 and $750,000, you can apply for a stamp duty concession. A Victorian stamp duty calculator will help you work out how much you can save. If Louisa pays $700,000 for her first home, she still has to pay $24,713 stamp duty – but that’s a saving of $12,357 off the full rate.
If you buy your first home on vacant land, you’ll only be charged duty on the vacant land – as long as you build your home and move into the property within 12 months of settlement of the land contract. Imagine if Luke, a first home buyer, buys a block of land for $500,000 and builds a $650,000 home on it. As he moves in within a year, he pays no stamp duty. While the value of his home is $1,150,000, Luke will only pay duty on the land value of $500,000, which is below the $600,000 maximum for a stamp duty exemption.
If you buy your first home off the plan (sign a contract for a property that hasn’t been built yet), you may be eligible for an off-the-plan concession. Amanda, for example, signs a contract to buy a $700,000 unit in a new development as her first home. Even though it’s above $600,000, she can access a special concession and pay no stamp duty at all. That’s because the “dutiable value” of her property is actually the contract price less the construction cost. Given that $300,000 of Amanda’s contract price will be spent constructing her unit, the “dutiable value” of her home is $400,000, meaning no stamp duty and happy days for Amanda.
You’ll need to use the State Revenue Office “Digital Duties Form”, which can be found at sro.vic.gov.au under Duties Online. Be sure to have the following info and documents on hand to apply for your stamp duty exemption, concession or reduction:
If you’re buying or building a new home in metro Melbourne, you could receive a $10,000 grant. If you live in regional Victoria, it’s a $20,000 grant for contracts signed between 1 July 2017 and 30 June 2021.
First home buyers of a new home with a price of $750,000 or less.
To qualify for this grant, you must be buying or building your first new home. This includes:
If you’re applying for the FHOG through an approved agent (your lender, which can be a bank or other financial institution), they’ll lodge the application form on your behalf – you just need to have signed it and had it witnessed.
If you’re applying for the FHOG directly to the State Revenue Office, go to sro.vic.gov.au for the application form and the details. You’ll need to lodge your application within 12 months of settlement or completion of construction.
If you’re building a new home, substantially renovating an existing one or buying a new (or off-the-plan) home, you could be eligible for the government’s $15,000 HomeBuilder grant.
This grant applies to first home buyers and existing homeowners who earn no more than $125,000 (individuals) or $200,000 (couples).
Eligibility and application process for the HomeBuilder Grant is governed by each State or Territory Government. Please speak with a lender to discuss how the grant could assist with your loan application.
Details of how to lodge your application online are available on the Victorian state website: sro.vic.gov.au. You’ll lodge your application in a multi-step process, with the initial lodgement made after an eligible HomeBuilder contract has been entered into. Applications must be received no later than 14 April 2021.
In November, the Victorian Government announced that home buyers can access a stamp duty waiver up to 50% on residential properties valued at $1 million and less.
This waiver applies to first home buyers and existing homeowners buying a property to live in or as an investment.
The waiver will be applied after all other eligible benefits – including the First Home Buyer Duty Concession – have been taken into account.
You just need to fill in the “Digital Duties Form” (found at sro.vic.gov.au under Duties Online). If you meet all the eligibility requirements, the State Revenue Office will automatically apply the waiver.
Our Concierge will call you once you've submitted your application to help handle the rest of the process.
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