Stamp Duty First Home Buyer

Stamp Duty First Home Buyer

Buying your first place in Melbourne can feel like finding a seat on a packed tram at 5:30 pm: possible, but you need to know exactly where to stand. Stamp duty is one of those 'where to stand' topics. Get it right and you could shave tens of thousands off the cost of your first home. Get it wrong and you may overpay, or miss a deadline you did not even know existed.

Let's unpack what stamp duty looks like for a first home buyer in Victoria in late 2025, what concessions actually apply in real life, and how to thread the needle whether you are bidding at a Brunswick auction or signing an off the plan contract in Southbank.

What Is Stamp Duty and Why First Home Buyers Get Relief

In Victoria, stamp duty is officially called land transfer duty. It is a state tax paid when a property changes hands. First home buyers can qualify for a full exemption or a sliding concession, provided the home sits under specific value caps and you meet eligibility rules. In a nutshell:

Full exemption if the dutiable value is $600,000 or less.

Concession on a sliding scale for dutiable value above $600,000 and up to $750,000.

Those caps haven't shifted in years, which is part of the reason the concession feels tight in parts of inner Melbourne, but the savings are still real and significant for eligible buyers.

Additional Concessions and Grants

Two other pieces often sit alongside the first home buyer duty relief:

The principal place of residence (PPR) concession, which gives a duty concession for owner occupiers who actually move in for at least 12 months, within 12 months of settlement.

The First Home Owner Grant (FHOG), a $10,000 payment for eligible buyers of newly built homes up to $750,000. It is separate from duty, but you can combine it with the first home buyer duty relief.

Who Qualifies as a First Home Buyer for Stamp Duty in Victoria

You will generally need to meet all the usual 'genuine first timer' requirements: you and your spouse or partner must not have previously owned a home in Australia that you lived in, and you will need to make the property your principal place of residence for at least 12 consecutive months, beginning within 12 months after settlement. The property must fall under the $750,000 cap for any first home buyer duty relief to apply.

Common Misunderstandings About Eligibility

Citizenship and residency: foreign purchasers pay foreign purchaser additional duty on top of ordinary duty, which can wipe out savings. There is a narrow pathway for a foreign purchaser buying jointly with an Australian citizen, permanent resident or eligible New Zealand citizen, but it is technical and needs advice.

Off the plan buyers: the off the plan concession affects how the dutiable value is calculated, not your 'first home buyer' status itself. More on that below.

Family violence exceptions: there are provisions that allow victim survivors to re qualify for benefits in certain circumstances, which can be life changing if you've had a prior relevant property interest. If this is your situation, ask for tailored advice early.

Melbourne First Home Buyer Stamp Duty Examples

You know those moments when a rule finally makes sense because you can picture it on your street? Here are a few that match how the market actually plays out around the city.

Example 1: A $595,000 One Bedder in Footscray

You buy a lived in apartment for $595,000, and you plan to move in within six months and stay for at least a year. You meet first home buyer criteria. Because the dutiable value is at or below $600,000, your land transfer duty is fully exempt. You still budget for legal fees, transfer fees and adjustments, but the duty line item disappears.

Example 2: A $715,000 Townhouse in Reservoir

You win at auction for $715,000, moving in after settlement. As a first home buyer under the $750,000 cap, you receive a concession (a partial reduction), rather than a full exemption. The precise duty depends on the SRO's scale, but it is substantially lower than for a non first home buyer at the same price. This is where it pays to run numbers before bidding. Your conveyancer or the SRO calculator can estimate the duty so you can set a hard cap for the auction.

Example 3: Off the Plan Apartment in the CBD

You sign a contract for a new apartment 'off the plan'. Here, the off the plan duty concession may reduce the dutiable value to the land component as at the contract date, excluding construction that has not yet occurred. In practice, the developer provides a statement of construction costs that is deducted from the contract price to arrive at the dutiable value. For buyers who will live in the property as their home, and who meet PPR or first home buyer criteria, the concession can be worth many thousands.

Even better, Victoria has extended the temporary off the plan concession to 20 October 2026, a policy designed to kick along apartment and townhouse construction. This makes off the plan particularly interesting for first home buyers trying to land under the $600,000 or $750,000 thresholds on the dutiable value. Do not confuse this with a 'free for all', though. You must still qualify as an owner occupier and meet other conditions.

How Stamp Duty Concessions Work Together

Think of your stamp duty outcome as a recipe. The ingredients must be added in the right order.

Step 1: Work out the dutiable value. For established homes, it is usually the purchase price. For off the plan, subtract eligible construction costs first to get the dutiable value.

Step 2: Apply first home buyer duty relief if you are eligible and the dutiable value is $600,000 or less (full exemption) or $600,001 to $750,000 (sliding concession).

Step 3: Apply the PPR concession where relevant. Many first home buyers already satisfy PPR requirements because they plan to live in the property, which can further reduce duty compared to an investor's rate. Remember the move in rule: at least 12 months of continuous occupancy, within 12 months of settlement.

Step 4: Overlay FHOG if the property is new and under $750,000. This is a cash grant, not a duty concession, but it effectively lightens your upfront costs.

Step 5: Check for extra duty if any buyer is a foreign purchaser. The 8% foreign purchaser additional duty sits on top of everything else and is calculated on your share before concessions, so it can dwarf savings. Get advice early if there is any doubt about someone's status or a trust structure.

What Changed in 2025 That First Home Buyers Should Know About

Temporary off the plan duty concession: extended to 20 October 2026, which can reduce dutiable value for eligible owner occupiers buying off the plan. This is very relevant for inner Melbourne and middle ring townhouse projects.

Victorian Homebuyer Fund: scrapped in the 2025 State Budget. If you were counting on equity sharing support, you will need a new plan, but your first home stamp duty concessions remain.

There is ongoing debate about the fairness of keeping the $600,000 and $750,000 caps in a city where the median sits higher, yet for many parts of Greater Melbourne those thresholds still capture a meaningful slice of first home stock, especially with off the plan projects and further out from the CBD.

The Melbourne First Home Buyer Timeline: How Duty Relief Fits Into Your Purchase

Here is how this typically plays out from the day you fall in love with a property to the day you get the keys.

Before You Bid or Sign

Get an estimate of your likely duty position. If you are hovering near $600,000 or $750,000, small changes can swing you from a full exemption to a partial concession, or out of eligibility altogether. Your conveyancer can run the numbers and sense check off the plan dutiable value claims.

Offer and Contract

In Melbourne, first home buyers often discover duty details at the worst time, five minutes before an auction or two hours before a cooling off deadline. Breathe. Ask for the vendor provided off the plan statement if you are buying new. Make sure the purchaser names match your loan pre approval, as adding a partner later can change your duty eligibility.

Apply for the Concession

The good news: your conveyancer or solicitor usually applies for the first home buyer duty exemption or concession when they complete the property transfer through Duties Online. You do not lodge a separate form at the counter. You will sign statutory declarations and provide ID so they can claim correctly on your behalf.

Settlement

The duty is paid at settlement from your funds. If you have a full exemption, the figure is zero, but it still needs to be recorded correctly so the Titles Office accepts the transfer. If you have a concession, it will show in the settlement statement alongside other adjustments.

Move In Clock

Once you settle, the 12 month move in clock starts. Make sure you actually move in and stay for a continuous 12 months. Keep proof, such as utility bills and your electoral roll update. The SRO can and does check.

Common Melbourne First Home Buyer Scenarios

'We're Buying with Mum and Dad on Title to Help Us Qualify for the Loan'

A non first home buyer on title normally disqualifies the purchase from first home buyer duty relief. If parents want to help, consider a guarantor arrangement with your lender rather than adding them to the transfer. If anyone on title is a foreign purchaser, the 8% additional duty may apply to that person's share. This is one to map with both your broker and conveyancer before you sign.

'Can We Still Get the Concession If We Rent It Out at the Start?'

No. For first home buyer duty relief and the PPR concession you must occupy the home as your principal place of residence for 12 months, starting within 12 months of settlement. If life changes and you cannot move in, speak to your conveyancer straightaway.

'Auction Price Pushed Us to $762,000… Now What?'

Unfortunately, the first home buyer duty concession cuts out above $750,000. If you think bidding could push you over the line, have a plan B property or set a hard limit so your numbers work without the concession. This is where off the plan can sometimes bring the dutiable value back under the threshold even when the contract price is higher, depending on construction costs and timing.

'We're Looking at a Brand New Apartment. Is Off the Plan Worth It?'

It can be. With the temporary off the plan concession extended to 20 October 2026, many first home buyers can reduce dutiable value enough to access the full exemption or at least a larger concession, provided they will live there and meet the criteria. Just remember: lower duty is great, but compare body corporate fees, quality, and future supply in the building so you are not saving a dollar only to spend two later.

Practical Tips That Save Real Money at Melbourne Open Homes

Run a duty check on every property you are serious about. If you are flirting with the thresholds, ask the agent for any off the plan construction cost breakdown early so your conveyancer can test it.

Mind the dates. The off the plan concession extension runs to 20 October 2026. Contracts signed after that date may not get the same treatment unless policy changes again.

Keep your occupancy evidence. Change your licence address, redirect mail, and update the electoral roll. If the SRO reviews your claim down the line, tidy records save your weekend.

If anyone is non citizen or non PR, get a foreign purchaser status check well before auction day. The additional duty is material and applies before concessions.

Remember the FHOG rules are different. Duty relief applies to new and established homes if you qualify, but the $10,000 FHOG only applies to new homes up to $750,000. Plan your cash flow accordingly.

Do not assume the Homebuyer Fund is available. It was scrapped in the 2025 Budget, so line up alternatives such as the federal First Home Guarantee if you need deposit support.

Frequently Asked Questions About First Home Buyer Stamp Duty Melbourne

Is Stamp Duty Really Abolished for First Home Buyers?

Not across the board. It is a full exemption up to $600,000, then a concession up to $750,000 if you qualify. Anything above $750,000 does not get first home buyer duty relief.

Can I Combine First Home Duty Relief with the PPR Concession?

Yes, the PPR concession and first home buyer duty relief can both apply if you meet the criteria. The PPR concession is about owner occupation for 12 months, which many first home buyers plan anyway.

What If I Buy Off the Plan?

The temporary off the plan concession can reduce the dutiable value by excluding yet to be built construction costs, and it has been extended to 20 October 2026. This can help you fall under the first home thresholds if you will live in the property.

Who Lodges the Paperwork?

Your conveyancer or solicitor usually claims the concession for you during the electronic transfer process. You will sign the statutory declaration they prepare.

Do I Still Pay Duty If I Am a Citizen But My Partner Is Not?

Possibly. Foreign purchaser additional duty can apply to the foreign partner's share, and it is an extra 8%. There are limited exceptions when buying with an eligible partner, so you need tailored advice.

A Melbourne First Home Buyer Story

Jess and Sam spent months traipsing from Coburg to Carnegie, hoping their budget would stretch. At an open in Preston, their buyer's agent ran a quick duty sanity check and realised an off the plan townhouse with a $690,000 contract price had a dutiable value just under $600,000 thanks to the construction cost split. That flipped them from a concession to a full exemption, and with FHOG in play, their cash at settlement dropped enough to keep their buffer for blinds, a fridge and that first trip to Bunnings. That is the difference a precise stamp duty plan can make.

Your Next Step Made Simple

If you are a stamp duty first home buyer in Melbourne, the smartest thing you can do is get your Section 32 reviewed and your duty position mapped before you make an offer. That one conversation can change your bidding limit, your suburb shortlist, and the type of property you target.

Speak to Pearson Chambers Conveyancing for a complimentary Section 32 review and tailored first home buyer duty advice:

Emailcontact@pearsonchambers.com.au