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 duty assistance is available to eligible first home buyers, in addition to the First Home Owner Grant.
Temporary exemptions and concessions
There are some temporary duty exemptions and concessions that may be available if you are a first home buyer, even if you don’t qualify for the first home buyer duty exemption or concession. There is:
- A duty waiver available on the purchase of a new or established Victorian residential property with a dutiable value of up to $1 million. Contracts must be signed on or after 25 November 2020 and before 1 July 2021.
- A duty exemption or concession for the purchase of residential property, with a dutiable value of up to $1 million, located within the City of Melbourne local government area. A 50% concession is available for new residential properties and a full exemption is available for new residential properties that have remained unsold for 12 months or more since completion of construction. Different contract dates apply for each. The 50% concession applies after all other eligible benefits, such as the first home buyer duty concession, the principal place of residence concession (including any off-the-plan concession), and the pensioner concession have been taken into account.
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.
The exemption or concession is only available to you once. If you or your partner has received the benefit of this exemption or concession previously, you cannot receive it again.
Unlike the First Home Owner Grant, it doesn’t matter whether you buy a new or established home. The exemption or concession is also available for vacant land.
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.
Use our calculator to calculate the duty you have to pay.
Find out more about applying for the first home buyer duty exemption or concession.
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.
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. Different rules may apply if you are buying vacant land and building your home.
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 $600,001, the greater the concession.
The table below provides guidance on how the concession works. You can also calculate how much concessional duty you have to pay using our calculator.
|Dutiable value ($)||Normal duty ($)||Duty after concession ($)|
The first home buyer duty exemption or concession may apply if you have bought vacant land to build your first home. From 16 December 2020, there is a new residence requirement for a vacant land transfer. You must move into your home:
- Within 12 months of the date you can lawfully live in it, which is usually the date the occupancy certificate is issued , or
- Within 36 months of settlement (whichever occurs first).
In limited circumstances, we may vary this requirement.
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% if you meet all 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 $600,000 or less.
All purchasers must also meet the First Home Owner Grant eligibility criteria and satisfy the residency requirement outlined in the earlier Living in your home section. If you buy the property with someone else, at least one of you must use the property as their home and satisfy the residence requirement.
Like the first home buyer duty exemption and concession, it is available for both new and established homes.
This table below illustrates how the 50% duty reduction applies to various property prices.
|Value of property ($)||Duty payable (for a principal place of residence) before reduction ($)||50% reduction ($)||Duty payable after reduction ($)|
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.
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 Services Australia (formerly the Department of Human Services) 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.
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 20-40%, 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.