First home buyer duty exemption, concession or reduction
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. This land transfer duty assistance is available to eligible first home buyers, in addition to the First Home Owner Grant.
Once you have read the information below, you can find out more about applying for the exemption or concession.
Exemption or concession
The first home buyer duty exemption or concession may be available if:
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.
Key requirements
Contract date from 1 July 2017To 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:
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:
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.
The table below provides guidance on how the concession works. You can also calculate how much concessional duty you have to pay using our calculator.
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. This land transfer duty assistance is available to eligible first home buyers, in addition to the First Home Owner Grant.
Once you have read the information below, you can find out more about applying for the exemption or concession.
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.
Key requirements
Contract date from 1 July 2017To 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.
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).
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.
The table below provides guidance on how the concession works. You can also calculate how much concessional duty you have to pay using our calculator.
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:
Duty reduction
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 you meet all of the following requirements:
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.
This table below illustrates how the 50 per cent duty reduction applies to various property prices.
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.
Duty reduction
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 you meet all of the following requirements:
- Your settlement date was on or after 1 September 2014.
- The contract price is $750,000 or less.
- The dutiable value is $600,000 or less.
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.
This table below illustrates how the 50 per cent duty reduction applies to various property prices.
Dutiable value
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.
This means that you will be ineligible for this duty reduction if your contract price is over $750,000, even if the dutiable value of your property after applying off-the-concession is $600,000 or less.
Source: State Revenue Office
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.
This means that you will be ineligible for this duty reduction if your contract price is over $750,000, even if the dutiable value of your property after applying off-the-concession is $600,000 or less.
Source: State Revenue Office