For many Victorians, the dream of owning a home can feel like a distant ambition. The financial hurdles, from saving a deposit to covering transaction costs, are significant. Fortunately, the Victorian Government offers a helping hand through several initiatives designed to make homeownership more accessible. Whether you’re buying a new build or an established property, there are substantial benefits available, but they come with important conditions, particularly the 12-month residency requirement.
Benefits for New Homes: The First Home Owner Grant (FHOG)
If you’re buying or building a brand-new home, you may be eligible for the Victorian FHOG. This is a $10,000 payment for new properties valued up to $750,000. It’s important to note that the FHOG is specifically for homes that have not been previously sold or occupied. This includes newly built houses, townhouses, and apartments. This grant is designed to ease the financial burden of entering the property market and stimulate new construction.
Benefits for Established Homes: Stamp Duty Savings
While the $10,000 FHOG is not available for established homes, first home buyers can still access a huge financial benefit in the form of stamp duty (land transfer duty) savings. For many, this can be worth even more than the grant itself. If you are an eligible first home buyer purchasing an established home:
- You will pay no stamp duty at all for a property valued at $600,000 or less.
- You will receive a stamp duty concession for a property valued between $600,001 and $750,000. The discount is applied on a sliding scale.
Given that stamp duty on a $600,000 home is normally over $30,000, this exemption represents a massive upfront saving.
The Critical 12-Month Residency Rule (For All Benefits)
Whether you are receiving the $10,000 FHOG for a new home or the stamp duty exemption for an established home, the most significant condition is the residency requirement. To be eligible, at least one of the applicants must:
- Occupy the home as their Principal Place of Residence (PPR).
- Live in the property for a continuous period of at least 12 months.
- Commence this 12-month residency period within 12 months of settlement or the completion of construction.
The purpose of this rule is to ensure these benefits are used for their intended purpose: to help people buy a home to live in, not to purchase an investment property. The State Revenue Office (SRO) is strict about this requirement. Failure to meet it can result in having to repay the full benefit received, potentially with interest and penalties. Limited exemptions exist, for example, for current members of the Australian Defence Force.
Plan Ahead Before You Apply
Before you apply for any first home buyer benefits, it’s crucial to consider your personal circumstances and whether you can realistically commit to living in the property for a full year.
The Victorian Government’s assistance for first home buyers is a fantastic opportunity, but it’s essential to understand the rules for the specific benefit you’re applying for. By being aware of the residency requirement and the distinction between benefits for new and established homes, you can make an informed decision and confidently take your first step onto the property ladder. For the most accurate and up-to-date information, always refer to the State Revenue Office Victoria website.