First home buyer VIC: the $10,000 grant, no stamp duty to $600,000, and how they add up

What do first home buyers get in Victoria?

Victorian first home buyers can get up to three kinds of help: the state's First Home Owner Grant, the state's first home buyer duty exemption or concession, and the federal 5% Deposit Scheme. They are separate, with separate rules, and a buyer can qualify for one without the others.

The grant is cash toward a new home. The duty exemption cuts a tax you'd otherwise pay at settlement. The 5% Deposit Scheme doesn't give you money at all: it lets you buy with a smaller deposit without paying lenders mortgage insurance (LMI), the insurance a lender charges you for when you borrow more than 80% of the price.

What this means for you: the grant gets the headlines, but it's for new homes only. For anyone buying an established home, the duty exemption and the deposit scheme are where the money is.

How much is the first home owner grant in Victoria?

The Victorian First Home Owner Grant is $10,000 for an eligible new home valued at up to $750,000 [1]. It's run by the State Revenue Office Victoria, the same state agency that runs stamp duty.

It's a grant, not a loan, and you don't pay it back. It's one piece of the Victorian package; the duty relief, which isn't limited to new homes, is the other.

Can you get the Victorian grant on an established home?

No. The Victorian grant is only for a new home [1]. Buy an established home and there's no grant, whatever the price.

The first home buyer duty exemption or concession is different. It applies to new homes, established homes and vacant land you'll build on, so a buyer of an existing house or unit up to $600,000 still pays no duty [3].

What this means for you: if you're choosing between new and established, the grant is only $10,000 of the difference. The price, the location and the duty relief can matter more.

What counts toward the $750,000 grant limit?

The Victorian grant's limit is a home valued at up to $750,000 [1]. For a home bought off the plan, the value tested is the contract price [2].

The same $750,000 is where Victoria's first home duty relief ends [3]. So a new home valued just over $750,000 misses the grant and the duty relief together. If your price is near that line, the number you agree is worth checking before you sign.

Do first home buyers pay stamp duty in Victoria?

Not on a home with a dutiable value up to $600,000. Victoria calls stamp duty land transfer duty, and its first home buyer duty exemption removes it in full up to that value [3]. Between $600,001 and $750,000 you pay a reduced amount, and over $750,000 there's no first home relief [3].

The dutiable value is usually the price you pay. The exemption isn't a grant: it's applied when your duty is assessed, usually by your conveyancer or solicitor at settlement, so it lowers a bill rather than putting money in your account.

Stamp duty calculator VIC: how much will you pay?

The State Revenue Office Victoria runs its own stamp duty calculator, and its figure is the official one. It works out the full duty on any price, and the reduced amount a first home buyer pays between $600,001 and $750,000.

We don't print Victorian duty in dollars on this page, because we haven't read the State Revenue Office's rate tables at the source, and a duty figure we can't trace back is worse than none. What we can say for certain: up to $600,000, a first home buyer who meets the conditions pays nothing [3].

For how duty works in every state, see the stamp duty calculator.

What happens between $600,000 and $750,000?

Between $600,001 and $750,000, Victoria's first home buyer concession gives reduced duty, and the duty rises with the price [3]. Over $750,000 the first home relief stops [3].

What this means for you: a buyer at $610,000 pays less reduced duty than one at $740,000, and one at $760,000 gets no first home relief at all. If your budget sits in this band, the price you negotiate moves the duty as well as the loan, so it's worth running the State Revenue Office's calculator on each price you're weighing up before you make an offer.

Buying land to build on in Victoria

Victoria's first home buyer duty exemption or concession covers vacant land you intend to build your home on, inside the same $600,000 and $750,000 lines [3].

The 5% Deposit Scheme can be used for vacant land with a separate contract to build, but the land price and the build cost together must stay under the price cap [5]. The land must be titled before the guarantee can be issued, inside the 90-day pre-approval window, and if you already own the vacant land, you can't use the scheme to build on it [5].

See construction loans.

Do you need to be enrolled to vote to get the Victorian stamp duty exemption?

Yes. To get Victoria's first home buyer duty exemption or concession, every purchaser on the contract must be enrolled to vote in Victorian elections [3]. It's a condition no other state has.

It's easy to miss because it isn't about money. One buyer who isn't on the Victorian roll, perhaps because they've just moved from interstate or never enrolled, can cost the whole contract its duty relief.

What this means for you: before you sign, check that every name on the contract is enrolled in Victoria. It's the cheapest check on this page.

Defence force members and the living-in rule

Active members of the Australian Defence Force are exempt from the Victorian duty exemption's requirement to live in the home for 12 months [3]. That matters if a posting moves you before the year is up.

The exemption from the living-in rule doesn't extend to defence force reservists or to Australian Public Service staff [3]. They must meet the 12 months like any other buyer. See defence force home loans.

The dependent child concession, and why it rarely helps

Victoria has a separate duty exemption or concession for a first home owner with a dependent child: a child under 18 in your care, custody and control who ordinarily lives with you [4]. Its limits are a dutiable value of $150,000 or less for the exemption and $200,000 or less for the concession [4].

Almost no home in Victoria comes in under those limits. It can be claimed alongside the standard first home buyer relief, but for nearly every buyer the standard relief is the one that counts [4].

Who counts as a first home buyer? Different tests for each scheme

There isn't one definition of a first home buyer in Victoria. The State Revenue Office sets the test for the grant and the duty relief, and the federal 5% Deposit Scheme and First Home Super Saver Scheme each ask their own question about what you've owned before.

What this means for you: passing one test tells you nothing about the others. A buyer who once owned a block of land or an investment unit, even with a former partner, can fail the deposit scheme's 10-year test and the super saver test. That's why we check every test against your history before you sign.

Can first home buyers in Victoria avoid LMI?

Yes, through the federal 5% Deposit Scheme. It lets a Victorian first home buyer buy with a 5% deposit and no lenders mortgage insurance, because Housing Australia, a government agency, guarantees the lender in place of the insurance [5]. Single parents and legal guardians can buy from a 2% deposit [5].

The scheme has no income cap and no limit on places [5]. It has a ceiling as well as a floor: if you have 20% or more saved after purchase costs such as stamp duty and legal fees, you can't use it [5].

Here's what LMI would cost on a 95% loan for a first home buyer, from one insurer's published rate card [8]. Under the scheme, that cost isn't charged. These are illustrations from one card, not quotes; your premium depends on the insurer, the loan and the lender.

Some lenders also waive LMI for certain professions. See LMI waivers.

What are the 5% Deposit Scheme price caps in Melbourne, Geelong and regional Victoria?

For the 5% Deposit Scheme, the Victorian cap is $950,000 in Melbourne and Geelong, and $650,000 everywhere else in the state [5]. Both the price you pay and the lender's valuation have to be at or under the cap [5].

Geelong is Victoria's only regional centre on the higher cap. A buyer in Ballarat, Bendigo or anywhere else outside Melbourne and Geelong is on the $650,000 cap [5].

What this means for you: in Melbourne and Geelong, the deposit scheme's $950,000 cap sits well above the duty exemption's $600,000 line and the $750,000 limit of the grant and the duty relief, so those bite first. In regional Victoria, the $650,000 cap is the tightest line, and a home over it misses the scheme even though it still gets reduced duty.

Help to Buy and the First Home Super Saver in Victoria

Two more federal schemes are open to Victorian buyers. Help to Buy is shared equity: the government contributes up to 30% of the price of an existing home, or up to 40% of a new one, and you buy with a deposit from 2% [6]. You own the home and share some of its value with the government. There are 10,000 places a year, and the current income limits are $103,000 for a single and $165,000 for joint applicants or a single parent [6]. All applicants must be Australian citizens [6].

The First Home Super Saver Scheme lets you save for a deposit inside your super. You can put in up to $15,000 a year, and up to $50,000 in total, in voluntary contributions, then ask the Australian Taxation Office to release them, with deemed earnings, toward your first home [7]. See Help to Buy and First Home Super Saver.

Can you get the grant, the duty exemption and a federal scheme together?

Mostly, yes. On a new home valued up to $600,000 you can get the $10,000 grant and pay no duty on the same purchase [1][3]. The 5% Deposit Scheme's guide says using it doesn't stop you getting state or territory help [5].

The one firm exclusion: the 5% Deposit Scheme and Help to Buy can't be used together [5]. Help to Buy also rules out state shared equity schemes, loans and guarantees, while stamp duty concessions and grants still apply [6].

What is the whole package worth on a Victorian home?

An illustration, not a client file. A first home buyer pays $580,000 for an established unit in Melbourne. There's no grant, because it isn't new. There's no stamp duty, because it's under $600,000 [3]. Through the 5% Deposit Scheme, a $29,000 deposit is enough, well under Melbourne's $950,000 cap, and there's no LMI: on the same 95% loan, one insurer's card puts it at about $18,514 [5][8][9].

Now a newly built home for $600,000 in Geelong. The grant is $10,000 [1]. There's no stamp duty [3]. A $30,000 deposit is enough under the 5% Deposit Scheme, and the LMI it avoids is about $19,152 on one insurer's card [5][8]. Counting the grant and the LMI together, that's about $29,152 the buyer gets or doesn't pay, before the duty saving [9].

Buy the same new home for $650,000 in Ballarat and it sits right on the $650,000 regional cap, so the deposit scheme still works, but only just; the grant still applies, and the duty is reduced rather than nil [1][3][5].

The State Revenue Office explains the state help and the federal sites explain the federal help, so the total on your own price is worth adding up before you sign. See how the schemes fit together.

Can the Victorian grant go towards your deposit?

Usually not at the time you need it. The grant is usually paid at settlement, or at the first progress payment on a build, so it can't pay the deposit you hand over when you sign the contract.

Plan your deposit from your own savings, and treat the grant as money that arrives later. For the 5% Deposit Scheme, the 20% ceiling is counted after purchase costs [5]: on a $600,000 home, $120,000 or more left after purchase costs puts you outside it [9].

How long do you have to live in the home?

Each scheme sets its own rule, and the strictest one you use is the one that counts.

What this means for you: if you use the 5% Deposit Scheme, plan to move in within 6 months of settlement, not the 12 months Victoria allows for the duty relief, and don't plan to rent it out later while the guarantee is in place [5].

What happens after you buy with the 5% Deposit Scheme?

The guarantee stays on the loan until it ends on its own, when the loan reaches 80% of the property's value on your scheduled repayments; extra repayments you can redraw don't count toward that [5].

While it's in place, the loan can't be increased, so there's no topping up for a renovation, and the home can't be rented out [5]. You can refinance to another lender on the scheme's panel and keep the guarantee, as long as you don't increase the loan or extend the term; refinance to a lender outside the panel and the guarantee is lost [5].

What this means for you: the scheme is built for a home you'll live in for a while. If you expect to move, rent it out or borrow more within a few years, that's worth planning before you choose it.

Buying with a partner, a friend or family

For Victoria's duty relief, every buyer on the contract must be enrolled to vote in Victorian elections, and at least one must be an Australian citizen or permanent resident [3].

The 5% Deposit Scheme takes exactly two people on a joint application, and they don't have to be a couple: partners, friends or family members. Both must pass every test, and three or more buyers can't use it [5]. The First Home Super Saver works person by person, so a couple can each use their own savings for the same home [7].

A parent can help in another way, by putting up part of their home's equity as security. See guarantor home loans.

Do you need to be a citizen to get first home buyer help in Victoria?

It depends on the scheme. Victoria's duty relief needs at least one buyer to be a citizen or permanent resident, and every buyer enrolled to vote in Victoria [3]. The 5% Deposit Scheme takes citizens and permanent residents, and Help to Buy asks for every applicant to be an Australian citizen [5][6].

If you're on a visa and buying with a partner who is a citizen or permanent resident, check the enrolment rule for every name on the contract before you sign. See home loans for visa holders.

Building a new home or buying off the plan in Victoria

A new home is where the Victorian grant lives. For a home bought off the plan, the value the grant tests is the contract price [2], and the limit is $750,000 [1].

Under the 5% Deposit Scheme, the building contract must be signed within 6 months of the loan settling, building must start within 12 months and finish within 36 months, and you move in within 6 months of the occupancy certificate [5]. Owner-builder contracts don't qualify; the builder must be licensed, insured and on a fixed-price contract [5].

For an off-the-plan home under the scheme, the contract is signed before the loan settles, settlement comes within 90 days of the home loan date, and you move in within 6 months of settlement [5]. See construction loans.

How much can a first home buyer borrow in Victoria?

What you can borrow comes from your income, your debts and your living costs, and each lender works it out its own way. The grant and the duty exemption don't change what a lender works out you can repay; they change how much cash you need on the day.

That's why the order matters: work out what lenders will lend you first, then fit the schemes to the price. See how much can I borrow.

What does a broker cost you?

How a broker is paid, and the rule Money Brain holds against it, is set out in full on its own page: what a mortgage broker costs.

Your first move

You've read the rules. Now there's one question left: on the home you want, at the price you'll pay, which of the grant, the duty relief and the federal schemes do you actually get, and in what order do you do it?

That depends on new or established, where in Victoria you're buying, whether every buyer is enrolled, and what you've saved, and it's what Money Brain works out before anything goes to a lender.