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Last Updated on 10 September 2019

Are first home buyers exempt from stamp duty?


First time home buyers and stamp duty
Key Points
  • First home buyer stamp duty exemptions or concessions are currently available in all states and territories except South Australia.
  • Stamp duty exemptions are based on the dutiable value of your property. You must also meet certain eligibility criteria.
  • First home buyer concessions can save you money, but you still need to carefully compare your home loan options.

 

What is stamp duty?

Stamp duty is one of those extra costs that you’re warned to look out for when buying a new home. It’s a state or territory tax on transactions, like the sale of land or transfer of property.

Depending on your location, stamp duty is sometimes referred to as transfer duty or general duty. Each state and territory sets its own stamp duty, usually a percentage of your property or land value.

First home buyer stamp duty can cost tens of thousands of dollars, putting a serious dent in your budget. In most cases, it’s unavoidable—unless you’re eligible for a concession.

So are first home buyers exempt from stamp duty? For some, the answer is yes, depending on your location and the value of your home.

Currently, all states and territories offer some form of stamp duty exemption or concession to first home buyers, with the exception of South Australia.

The amount of stamp duty charged is based on your property’s dutiable value. According to the state revenue office of Victoria, dutiable value is the price you paid for the property or its market value (whichever is greater) including GST.


 

First home buyer stamp duty exemptions

Each state and territory has jurisdiction over their first home buyer duty concession, should it choose to offer one. These schemes change over time, so you should always check with your local government to confirm the details.

All states and territories require that home buyers be 18 or older, and at least one buyer must be an Australian citizen or permanent resident. Here’s what you can expect from each state.

NSW: First Home Buyers Assistance Scheme (FHBAS)

New South Wales offers full or partial exemption on transfer duty for contracts entered into on or after 1 July 2017. Buyers must be buying their first home in Australia, move into the home within 12 months and live there for a minimum of six straight months.

The FHBAS applies to purchases of existing homes, new homes, and vacant land on which you plan to build a home.

  • Full exemptions may be granted for homes valued at less than $650,000.
  • Concessional rates may be granted for homes valued between $650,000 and $800,000. The rate depends on the value of the home.
  • No transfer duty applies to vacant land valued at less than $350,000
  • Concessional rates may be granted for land valued between $350,000 and $450,000.

To apply, download the application form and lodge with your conveyancer, after you’ve exchanged contracts.

ACT: Home buyer concession scheme (HBCS)

From 1 July 2019, the ACT Government is introducing a new income-tested concession scheme to help first home buyers save on stamp duty. Buyers must be purchasing a new home or vacant land. At least one buyer must move in within 12 months and live there for at least one continuous year.

To be eligible, the total gross income of all home buyers and their domestic partners in the financial year preceding the transaction date must be below $160,000. If this is the case, no stamp duty will apply on the purchase.

This income threshold increases with the number of dependent children, up to a total gross income of $176,650 for five or more dependent children.

No application is required. To claim, eligible buyers can claim the HBCS concession code on the transfer instrument lodged for registration at Access Canberra.

Current property thresholds for full and partial duty exemptions are as follows:

  • Full exemption for new properties with a dutiable value of $470,000 or less
  • Partial exemption for new properties valued between $470,000 and $607,000
  • No transfer duty applies to vacant land valued at $281,200 or less
  • Concessional rates may be granted for land valued between $281,200 and 329,500

VIC: First home buyer duty exemption

Eligible first home buyers must have entered into a contract of sale on or after 1 July 2017. Eligibility criteria are the same as with the First Home Owner Grant, with two exceptions: the home does not have to be a new home, and its contract price can exceed $750,000.

However, the dutiable value cannot exceed $750,000. This applies when the price paid for the property is less than market value.

  • Full exemptions may be granted for homes valued at less than $600,000.
  • Concessional rates may be granted for homes valued between $600,001 and $750,000. The rate depends on the value of the home.

At least one buyer must move in within 12 months of settlement and make the property their principal place of residence for at least 12 continuous months.

QLD: First home concession

First home buyers can claim a concession on transfer duty when they meet the requirements. Buyers must move in within one year of settlement and live there continuously for at least one year.

  • Applies to homes valued under $550,000 and can save buyers up to $15,925
  • No duty is payable for homes valued at $500,000 and under

For homes valued over $550,000, the standard home concession may apply. It is open to all eligible buyers – not just first home buyers – and can save you up to $7,175. The concession rate applies to the first $350,000 of the residence. General transfer duty rates apply to the balance.

NT: First home owner discount

Stamp duty discounts only apply to first home buyers buying an established home in the Northern Territory. It must be the buyers’ first home in Australia, and at least one buyer must live in the home for a minimum of six months, within 12 months of possession.

The discount is a full stamp duty concession on the first $500,000 of a home valued up to $650,000. This translates to a savings of up to $23,928.60.

According to the NT Government, an established home is one that has been previously sold or occupied. New constructions are not eligible for this discount.

WA: First home owner rate of duty

Buyers who are eligible for the First Home Owner Grant are also eligible for a concessional rate of transfer duty, as long as the home’s dutiable value is below the threshold. The FHOG only applies to new homes, and buyers must live in the home for at least six months within 12 months of settlement.

  • Concessions are available for homes + land with a dutiable value of up to $530,000
  • Concessions are available for vacant land with a dutiable value of up to $400,000

TAS: Duty concession for first home buyers of established homes

For a limited time, eligible first home buyers can benefit from a duty concession when buying an established home. Buyers must meet eligibility criteria and live in the home for at least six months, starting within 12 months of purchase.

  • 50% discount on property transfer duty for homes with a dutiable value of $400,000 or less

This duty concession was extended, making it available on purchases that settle between 7 Feb 2018 and 30 June 2019 inclusive.

Other ways to save on your first home

Saving on your stamp duty isn’t the only way to cut costs on your first home purchase. You’re probably also aware of the first home owners grant, which provides some financial relief to first home buyers.

At the moment, grants are available in all states and territories, ranging from $7,000 in the ACT to $26,000 in the NT.

These grants are enticing, but you may find that you don’t meet the eligibility criteria. If this is the case, then you’ve still got another big way to save: by shopping around on your home loan.

When you’re buying your first home, it’s not always clear which lender is offering the best deal for your situation. Should you go with the feature-heavy loan, the name you recognise, or the lowest interest rate?

For help with these questions—and a side-by-side comparison from over 27 leading lenders—visit Home Loans Australia. We’ll get you through the paperwork and do our best to save you money along the way.

*Fees, charges, terms and conditions apply.

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