First-Home Buyer Stamp Duty Concession VIC: 2026 Thresholds

What Changed on 1 July 2024

Victoria lifted the First Home Buyer Duty Exemption threshold from $600,000 to full exemption on properties up to $600,000 and introduced a tapered concession for properties between $600,000 and $1,000,000 as of 1 July 2024. Prior to this date, the concession ceiling sat at $750,000. These thresholds remain in force through 2026 and apply to both established homes and off-the-plan purchases that meet the State Revenue Office Victoria (SRO) principal place of residence test.

For context: a $650,000 purchase prior to July 2024 attracted roughly $34,070 in full stamp duty; under the current regime, you pay a reduced amount via the tapered concession. A $600,000 purchase now incurs $0 in stamp duty for an eligible first-home buyer. That single change can represent a cash saving of $31,070—money that can sit in your offset account, fund initial repairs, or top up your deposit for a second property down the track.

Eligibility Criteria in 2026

To claim the exemption or concession, you must satisfy all of the following:

1. Natural person — companies, discretionary trusts, unit trusts, and SMSFs are excluded. If you hold your first home in a family trust structure, you forfeit the concession.
2. Australian citizen or permanent resident at the time of acquisition.
3. First home — you and your spouse (if any) have never owned residential property in Australia before the dutiable transaction. Inherited property counts; investment property purchased before age 18 counts; overseas property generally does not count unless it was used as a residence.
4. Occupy within 12 months and continue to occupy as your principal place of residence for a continuous 12-month period.
5. Transaction date — contract signed on or after 1 July 2024 and on or before the current program sunset (no announced end date as of January 2026).

SRO Victoria cross-references your declaration against land titles data and ATO records. A false declaration can trigger reassessment, penalty tax at 100% of the unpaid duty, plus interest compounding daily. If your circumstances change—say you take a secondment interstate six months after settlement—you must notify SRO within 30 days and may face a partial claw-back.

How the Thresholds and Tapers Work

Full Exemption: $0–$600,000

Purchase price ≤ $600,000: you pay $0 stamp duty.

Example: $590,000 house in Melton. Duty = $0. Contrast this with a non-first-home buyer paying ~$30,070.

Tapered Concession: $600,001–$1,000,000

The concession tapers linearly. The formula is:

Concession amount = Full duty × [(1,000,000 − purchase price) ÷ 400,000]

Full duty is calculated using Victoria's general rates—3.5% on the first $25,000, 4% on $25,001–$130,000, 5% on $130,001–$960,000, and 6.5% above $960,000.

Example: $800,000 townhouse in Brunswick.

• Full duty (non-concessional) = $43,070.
• Concession = $43,070 × [(1,000,000 − 800,000) ÷ 400,000] = $43,070 × 0.5 = $21,535.
• You pay $43,070 − $21,535 = $21,535.

At $999,999, the concession shrinks to near-zero; at $1,000,001, you pay full duty.

Use the InvestorJoint VIC stamp duty calculator to model scenarios across the taper band—especially useful if you're bidding at auction and want a ceiling figure before you raise your hand.

Principal Place of Residence Test

"Principal place of residence" means more than mail forwarding. SRO expects:

• Physical occupation (you sleep there most nights).
• Utility connections in your name (electricity, gas, internet).
• Driver licence and electoral roll updates.
• No concurrent lease of the property to a third party during your 12-month occupy period.

A common mistake: purchasing a two-bedroom unit in Docklands, living there for eight months, then moving in with a partner and leasing out the unit. SRO will claw back the concession because you failed the continuous 12-month test. The occupy period starts from settlement or from the date you could reasonably move in (whichever is later). Off-the-plan buyers can delay the start of the 12-month clock until practical completion, but you must still move in within 12 months of settlement.

Off-the-Plan Purchases and the $750,000 Legacy Threshold

If you signed a contract before 1 July 2024 for an off-the-plan apartment settling in 2025 or 2026, you remain subject to the old thresholds:

• Full exemption: ≤ $600,000.
• Concession: $600,001–$750,000 (taper formula uses a $150,000 denominator).

Settlement date is irrelevant; contract date governs. This creates an edge case: a buyer who signed in June 2024 for a $680,000 apartment settling in March 2026 receives a smaller concession than a buyer who signed in August 2024 for the same property. The June 2024 buyer's concession tapers over a $150,000 band; the August buyer tapers over $400,000. Always confirm contract date with your conveyancer before lodging the First Home Buyer statement.

Joint Purchases and Spouses

Both you and your co-purchaser (spouse or otherwise) must each satisfy the first-home test. If your partner previously owned a Geelong investment unit sold three years ago, you are ineligible—even if this is your first purchase. SRO treats you as a single economic unit.

For unmarried couples, the definition of "spouse" under the Duties Act 2000 (Vic) includes de facto partners living together on a bona fide domestic basis. Six months of cohabitation with shared finances generally suffices. Roommates splitting a duplex are fine; romantic partners are caught.

If one party is a non-resident or temporary visa holder, the non-resident surcharge (currently 8% as of 2024, indexed annually) applies to their beneficial share in addition to any duty payable. A 50/50 purchase by a citizen and a 457 visa holder will attract the concession on the citizen's half and the 8% surcharge on the non-resident's half—plus base duty if the price exceeds $1,000,000.

Interaction with the First Home Owner Grant (Regional)

The First Home Owner Grant (FHOG)—a $10,000 cash grant for new or substantially renovated homes in regional Victoria—runs parallel to the duty concession but is not stackable in metropolitan Melbourne. The FHOG applies to homes valued up to $750,000 in designated regional local government areas (LGAs): Ballarat, Bendigo, Geelong, Latrobe, Wodonga, and others listed in SRO schedule.

You can claim both the FHOG and the duty concession if purchasing in, say, Ballarat—a $620,000 new townhouse attracts $0 duty (exemption) plus $10,000 FHOG. Metro buyers choosing a $620,000 new apartment in Footscray receive only the $0 duty; no FHOG.

If you buy in a regional LGA but the property is used-established-home stock (not new or substantially renovated), you receive the duty concession but no FHOG. "Substantially renovated" means demolition and rebuild, not a cosmetic kitchen reno; SRO requires evidence of building permits and occupancy certificates.

CGT and Future Investment Strategy

Many first-home buyers plan to convert their starter home into an investment property once they upsize. The stamp-duty saving does not create a CGT liability on Day 1, but the principal-place-of-residence exemption clock starts ticking at settlement.

Scenario: you buy a $580,000 unit in Coburg in February 2025, claim full exemption ($0 duty), live there for 18 months, then lease it out when you buy a $950,000 house in Eltham in August 2026. The Coburg unit becomes an investment asset. Under s118-192 of the Income Tax Assessment Act 1997 (Cth), you can treat the property as your main residence for CGT purposes for up to six years while it's rented, provided you don't claim another property as your main residence during that time.

From a portfolio construction lens, retaining the Coburg unit means holding two properties—one in a high-growth middle ring, one in an established family suburb—without paying stamp duty twice on entry. That $30,070 you saved sits in your offset against the Eltham loan or funds depreciation schedules and quantity surveyor reports for both properties. Use the negative gearing calculator and hold vs sell calculator to model the net position after land tax and interest deductions.

Be mindful: Victoria's land tax applies to investment property with site value above $50,000 (trust rate) or $300,000 (individual rate) as of 2024. The Coburg unit will attract land tax once it's leased, even if your total landholding is below the trust threshold, because the principal-place-of-residence exemption ceases when you move out. Factor ~$1,200–$2,500 p.a. into your cashflow model.

Common Traps and Audit Triggers

1. Signing before occupancy intent is clear — purchasing "to live in or lease out depending on the market" is not sufficient. SRO requires genuine intent at contract date. If you sign, then accept a 24-month posting to Singapore a week later, you may lose the concession.
2. Renovate-and-flip within 12 months — selling before the 12-month occupy period ends triggers a full claw-back. SRO sees this as property speculation, not bona fide owner-occupation.
3. Incomplete statutory declarations — the First Home Buyer Statement (Form FHB-001) must be lodged with your transfer of land. Missing fields or unsigned co-purchaser declarations delay settlement and may void the concession if discovered post-settlement.
4. Non-disclosure of prior ownership by spouse — even if your spouse's previous property was sold at a loss or held in a different name, it counts. SRO performs title searches nationally.
5. Dual contracts for land + build — if you buy a $400,000 vacant block and engage a builder for a $350,000 house (total $750,000), the concession applies only to the land portion if the land and build are separate transactions. SRO treats land-and-build packages sold by a single vendor as a single dutiable transaction of $750,000, eligible for concession. If land and build are separate vendors, only the $400,000 land parcel qualifies (full exemption), and the builder contract is not dutiable.

What This Means for Your Portfolio

The first-home concession offers material savings—up to $31,070 for a $600,000 purchase—but it locks you into owner-occupation and excludes entity structures. If your medium-term plan is to build a multi-property portfolio via a discretionary trust or SMSF, you face a trade-off: claim the concession today and own in personal name, or purchase in trust, pay full duty, and preserve asset protection plus income-splitting flexibility.

For investors targeting negative gearing and eventual capital growth, buying the first property in personal name (concession) and subsequent properties in trust often maximises the total tax shield. Your $580,000 Coburg unit—held personally—generates a $12,000 annual loss offset against PAYG income at your marginal rate. The second property—held in a family trust—distributes rental profit to a lower-income beneficiary or accumulates in the trust if negatively geared, preserving franking credits and depreciation deductions.

InvestorJoint's entity-first accounting automatically segments profit/loss by ownership structure. When you add a property, you assign it to Self, Trust A, Company B, or SMSF C, and the platform calculates land tax, CGT discount eligibility, and trust distribution entitlements across the portfolio. Your 2026 tax pack reflects the Coburg unit (Self) and the Eltham house (Self) separately from any trust-held properties, ensuring your accountant sees clean P&L per entity. Explore the trust vs personal calculator to model duty + land tax + CGT over a 10-year hold.

For complex structures—SMSF borrowing to acquire a $900,000 Brunswick warehouse conversion, or a unit trust funding a $1.2m Southbank apartment—stamp duty concessions are unavailable, but careful timing of purchases around financial-year boundaries, depreciation maximisation via depreciation calculator, and strategic use of the rental cashflow calculator can recover the duty cost within 3–5 years through tax savings.

If you're purchasing in 2026, confirm your contract date, review SRO's online checklist, and model both the immediate cash saving and the downstream CGT + land tax position. The concession is a one-time benefit; the structure you choose on Day 1 shapes decades of tax outcomes.