Do first home buyers in Victoria have to pay stamp duty?

Purchasing your first home is a thrilling milestone, especially in a vibrant city like Melbourne. But alongside the excitement comes a stack of financial considerations, and one of the biggest is stamp duty. If you’re a first home buyer in Victoria, you might be wondering whether you’ll need to fork out thousands on this tax or if there’s a way to dodge it altogether. Spoiler alert: there’s good news! Depending on your property’s value and type, you might not have to pay stamp duty at all or at least not the full whack. In this guide, we’ll break down everything you need to know about stamp duty for first home buyers in Victoria in 2025, from exemptions to eligibility, so you can step into home ownership with confidence.

What Is Stamp Duty, Anyway?

Let’s start with the basics. Stamp duty, or land transfer duty as it’s officially called, is a tax slapped on property purchases by the Victorian government. How much you pay depends on the property’s dutiable value, usually the purchase price plus any extras like renovations or GST. For most buyers, it’s a hefty chunk of change that piles onto the cost of buying a home. But if you’re a first home buyer, Victoria’s got your back with some pretty generous concessions and exemptions designed to make that leap into the property market a bit less daunting.

Stamp Duty Exemptions and Concessions for First Home Buyers

Now, here’s where it gets exciting. As a first home buyer in Victoria, you’ve got options to slash or even wipe out your stamp duty bill. Let’s unpack them.

Full Exemption for Properties Under $600,000

If you’re eyeing a home valued at $600,000 or less, you’re in luck. Victoria’s First Home Buyer Duty Exemption means you won’t pay a single penny in stamp duty. This applies whether you’re snapping up an established home in a Melbourne suburb like Brunswick or a shiny new apartment in Southbank.

Picture this: a $550,000 home would normally rack up about $28,070 in stamp duty. But as a first home buyer, you pay nothing. That’s a massive saving you could pour into new furniture, a snazzy kitchen upgrade, or even a bigger deposit to secure your dream place.

Concessional Rates for Properties Between $600,000 and $750,000

What if your perfect pad creeps above $600,000? Don’t stress, there’s still help on offer. For homes valued between $600,000 and $750,000, you qualify for a sliding scale concession. The closer your property gets to $750,000, the less discount you’ll get, but the savings are still significant.

Here’s how it might look:

A $630,000 property would usually cost you $32,870 in stamp duty. With the concession, that drops to around $6,574, saving you a cool $26,296.
For a $700,000 home, the standard duty is $37,070, but the concession knocks it down to roughly $24,713, putting $12,357 back in your pocket.

This tiered setup means even if you’re shopping in pricier Melbourne hotspots like Fitzroy or St Kilda, you’re not left out in the cold.

New 2025 Concessions for Off the Plan Purchases

Here’s something fresh for 2025. In October 2024, the Victorian government rolled out expanded concessions for off the plan properties, think apartments, townhouses, or units. These perks run until October 2025 and let you deduct construction costs from the dutiable value, shrinking your stamp duty bill. While this applies to all buyers, it’s a game changer for first timers in Melbourne’s bustling inner city market.

How does it work? Say you’re buying an off the plan apartment for $620,000, with $400,000 tied up in construction costs. Instead of paying duty on the full $620,000, you’re taxed on just $220,000. That slashes your stamp duty from $32,000 to $0. Or imagine a $700,000 townhouse with $350,000 in building costs, you’d pay duty on $350,000, cutting the bill from $16,070 to $0. That’s $16,070 saved, which could mean a better spot in Melbourne or a swankier fit out.

This move is all about boosting housing supply while making those sleek new builds more affordable for Melburnians.

Who Qualifies for These Sweet Deals?

Before you start celebrating, you’ll need to tick a few boxes to snag these exemptions or concessions. Here’s what the Victorian government looks for:

Residency: At least one buyer needs to be an Australian citizen or permanent resident.
Age: Everyone applying must be 18 or older.
Living There: The property has to become your main home within 12 months of buying it. If it’s vacant land, you’ve got 24 months to build and move in.
First Timer Status: Neither you nor your partner can have owned residential property in Australia before.

These rules are non negotiable, so double check you’re in the clear. For instance, if you buy a place but don’t move in on time, you might have to pay the full stamp duty later. Keep your plans tight and your paperwork handy.

Extra Goodies for First Home Buyers

Stamp duty relief isn’t the only support out there. Victoria throws in a couple of bonuses to sweeten the deal.

Vacant Land Purchases

Fancy building your own home? If you’re buying vacant land, stamp duty concessions still apply based on its value:

Full exemption for land under $600,000.
Partial concessions for land between $600,000 and $750,000.

So, if you’re dreaming of a custom build in a growing Melbourne fringe area like Craigieburn, you could save big upfront.

First Home Owner Grant (FHOG)

Then there’s the First Home Owner Grant. It’s not tied to stamp duty, but it’s a handy cash boost: $20,000 for new builds in regional Victoria, or $10,000 for new homes in Melbourne under $750,000. It’s perfect for offsetting other costs or upgrading your plans, maybe a bigger balcony or a fancy ensuite.

How Do You Claim These Concessions?

Getting your stamp duty discount isn’t rocket science, but it does take some care. Here’s the drill:

Gather Your Papers: You’ll need proof of residency (like a passport), identity, and your property contract.
Send It In: Submit everything to the State Revenue Office (SRO) within 12 months of settlement. Missed it? You can still claim up to five years later if you qualify.

Get it right the first time to avoid hiccups. Messy paperwork or late submissions could hold things up or cost you penalties.

Watch Out for These Slip Ups

While applying, steer clear of these common traps:

Wrong Valuation: Overstate your property’s worth, and you’ll pay more duty than needed.
Missing the Deadline: Don’t let that 12 month window slip by.
Dodgy Docs: Incomplete or incorrect forms can derail your claim.
Assuming You Qualify: Check those eligibility rules, don’t just hope for the best.

Stay sharp, and you’ll sail through.

Why Chat to a Conveyancing Expert?

Let’s be real, buying a home is a maze of contracts, rules, and deadlines. Stamp duty exemptions sound great, but one wrong move could mean delays or lost savings. That’s where a conveyancing expert comes in clutch. They’ll:

Check if you’re truly eligible for concessions.
Make sure you meet residency and living requirements.
Handle all the SRO paperwork so it’s spot on and on time.

For first timers like Sarah, a 28 year old who nabbed a $580,000 apartment in Melbourne, expert help was a lifesaver. She paid no stamp duty and moved in within six months. “I was clueless at first,” she says, “but my conveyancer sorted it all out. Worth every second.”

Wrapping It Up: Your Next Move

So, do first home buyers in Victoria have to pay stamp duty? Not always! With full exemptions under $600,000, concessions up to $750,000, and those shiny new 2025 off the plan perks, you’ve got plenty of ways to keep costs down. Whether you’re hunting in Melbourne’s inner suburbs or building from scratch, knowing your options is the key to saving thousands.

Ready to jump in or just need a bit more clarity? Reach out to Pearson Chambers Conveyancing. They’re pros at making this stuff simple, offering:

Free Section 32 Contract Reviews: Make sure your deal stacks up under Victorian law.
Tailored Advice: Maximise your stamp duty savings and grants.

Give them a shout today:

Phone: 03 9969 2405
Email: contact@pearsonchambers.com.au