The much anticipated stamp duty savings for first time buyers have come into effect in Victoria. So what exactly are the changes?
If you are an eligible first-home buyer who buys a new or established home, you will be exempt from paying duty if: The dutiable value is $600,000 or less, your contract date is on or after 1 July 2017, at least one of the purchasers uses the property as their home and satisfies the residence requirement, and if the dutiable value is more than $600,000 but not more than $750,000, you will pay a concessionary amount of duty.
The concession applies on a sliding scale. The closer the dutiable value is to $600,001, the greater the concession.
If you satisfy the eligibility requirements for the First Home Owner Grant (FHOG), you will be entitled to the first-home buyer duty reduction. This is the case even if your circumstances prevent you from actually receiving the FHOG. This could be, for example, because your first home purchase is an established/existing home (as opposed to a newly built home). The FHOG is not available for established/existing homes purchases.
You must also live in your property as your principal place of residence (PPR) for a continuous period of 12 months, commencing within 12 months of settlement, to maintain your eligibility for the duty reduction.
If you buy the property with someone else, at least one of you must satisfy this residency requirement. It is not necessary, however, for the same purchaser to occupy the home for the whole 12 months.
If a change in your circumstances means you cannot, or no longer, meet the residence requirement, you must notify the State Revenue Office of Victoria as soon as possible. More detailed information regarding the changes can be found on the SROV’s website www.sro.vic.gov.au/fhbdutyreduction