If you are purchasing your first home you may be eligible for the first home buyer duty exemption or concession.
If you entered into your contract to buy your first home before 1 July 2017, you may be eligible for the first home buyer duty reduction.
Unlike the First Home Owner Grant, which is only available for newly built properties or properties sold for the first time as residential premises, these first home buyer duty benefits are available when you are buying an established or new home.
If you are buying a property with a foreign purchaser, special rules may apply.
Duty exemption or concession
To be eligible for the first home buyer duty exemption or concession, your transaction must satisfy all these requirements:
- You purchased a home under a contract signed on or after 1 July 2017.
- The dutiable value, determined after applying any off-the-plan concession (i.e. it may be less than the contract price) of the home is:
- $600,000 or less to receive the first home buyer duty exemption,
- Between $600,001 and $750,000 to receive the first home buyer duty concession.
- All purchasers meet the First Home Owner Grant eligibility criteria.
- At least one purchaser must satisfy the residency requirement. Australian Defence Force personnel are exempt from this residency requirement for transfers entered into on or after 1 July 2018. The exemption applies to current members of the Australian Army, Air Force or Navy who are enrolled to vote in Victorian elections and are either on duty or leave. The exemption does not apply to Australian Army, Air Force or Navy reservists or to Australian Public Service staff.
The concession applies on a sliding scale. The closer the dutiable value is to $600,001, the greater the concession. You can calculate how much concessional duty you have to pay using our calculator.
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, or
- 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.
However, if you are the purchaser or substitute purchaser under a contract entered before 1 July 2017, you may be eligible for the first-home buyer duty reduction.
If you are an eligible first home buyer who entered into a contract to buy a home before 1 July 2017, you will receive a 50 per cent reduction of duty if:
- Your settlement date was on or after 1 September 2014,
- The home purchased has a dutiable value of $600,000 or less,
- The contract price is $750,000 or less,
- At least one of the purchasers uses the property as their home and satisfies the residence requirement.
As with the exemption or concession, all purchasers must also meet the First Home Owner Grant eligibility criteria.
In most cases, the dutiable value of a property is the contract price you pay for it. If the price you pay for the property is less than market value, however, 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 greater of the price paid or the market value, 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.
Purchasers eligible for the off-the-plan concession need to contact their vendor to get the dutiable value of their property, including the off-the-plan concession.
To be eligible for the first home buyer duty concession or exemption, the dutiable value of your property must be $750,000 or less.
To be eligible for the first home buyer duty reduction, the dutiable value of your property must be $600,000 or less.
All purchasers and their partners must satisfy the eligibility criteria for the First Home Owner Grant to be entitled to the first home buyer duty exemption or concession or duty reduction.
This is the case even if your circumstances prevent you from actually receiving the grant. This could be, for example, because your first home purchase is an established or existing home as opposed to a newly built home. The grant is not available for established or existing home purchases.
You are required to 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, this requirement may be varied by the Commissioner.
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.
How does the first home buyer duty concession work?
The first home buyer duty concession applies on a sliding scale. The closer the dutiable value is to $600,001, the greater the concession.
You can calculate your duty here and this table also provides guidance on how the concession works.
|Dutiable value ($)||Normal duty ($)||Duty after concession ($)|
How does the first home buyer duty reduction work?
This table illustrates how the 50 per cent duty reduction applies to various property prices.
|Value of property ($)||Duty payable (for a PPR) before reduction ($)||50% reduction ($)||Duty payable after reduction ($)|
What if I qualify for a pensioner benefit and a first home buyer benefit?
While you may qualify for the pensioner benefit and the first home buyer benefit, you cannot receive both for the same transaction. You must choose one or the other.
Which one should I choose?
If you are eligible for an exemption or concession as both a first home buyer and a pensioner, you can use our calculators to compare the duty you will pay, if any, after receiving the benefit of each.
Remember, the first home buyer duty benefits are only available when you buy your first home. They are not available on subsequent home purchases.
While the pensioner exemption or concession is available to you only once, the home you buy does not have to be your first home. It may be available for a subsequent home purchase.
Calculate how much duty you pay as a first home buyer.
Calculate how much duty you pay as an eligible pensioner buying a home.
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.