Clients of mine recently purchased an apartment off the plan for $550,000 in Melbourne. As (1) they had never owned property in Australia (2) the property they were purchasing had never previously been lived in and (3) the property was valued at under $750,000, they were entitled to a $10,000 First Home Owners Grant from the Victorian State Government. In addition to the First Home Owners Grant, they were also entitled to a Stamp Duty Concession – a 50% reduction. As they had purchased the property off the plan, the Stamp Duty was approximately $3,000, so with a 50% reduction, they saved around $1,500 in Stamp Duty.
Before you start searching for your first home, it pays to know where you stand on any government concessions that might help you out. These concessions tend to vary state by state and situation by situation, so if you need an explanation, please get in touch and we can discuss how they work.
First Home Owner Grant
The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria. Although it is a national scheme, it is funded by the states and territories and administered under their own legislation.
For information on the FHOG in your specific state you can visit firsthome.gov.au .
Stamp duty breaks and concessions
Some of Australia’s state governments have concession waivers of the stamp duty associated with a property purchase.
Stamp duty is a tax applied to certain property transitions. When land is sold, transferred or leased, for example, stamp duty is generally payable. It is usually the buyer, not the seller, who is liable to pay stamp duty. Payment must generally be made within three months of entering into the contract for purchasing the property. The amount of stamp duty payable depends on the value of the property and the amount for which it is sold, transferred or leased. It is calculated on its market value or the price paid by the buyer.
Each state government has its own rules surrounding stamp duty on property purchases. For this reason, the exemptions and concessions available differ from state to state.
Some first home buyers, vacant land holders, and farm buyers may be entitled to some exemption or discount on stamp duty. You can check out whether any apply to you by contacting the revenue office in your state or territory (see the list below for details).
You can also find further information on the First Home Owner Grant or details on stamp duty breaks on your state’s relevant government office website.
ACT – revenue.act.gov.au
NSW – osr.nsw.gov.au
NT – nt.gov.au/ntt/revenue
QLD – osr.qld.gov.au
SA – revenuesa.sa.gov.au
TAS – sro.tas.gov.au
VIC – sro.vic.gov.au
WA – osr.wa.gov.au
Don’t worry if you find eligibility criteria for First Home Owners Grants and Stamp Duty Concessions confusing – you are not alone! Get in touch and we will let you know (in an jargon free way!) how these might apply to the purchase of your first home. You can contact Doug at (e) firstname.lastname@example.org or (m) 0408 671 524.
Douglas Piening is a Mortgage and Finance Broker with Choice Home Loans and is passionate about providing advice you can trust. Whether it’s buying a home, refinancing a loan, investing, building or renovating, Doug brings a wealth of knowledge and expertise to assist with your lending needs.
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This information is of a general nature only and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances.
*Note: Details are current as at publish date and should be confirmed with your local Office of State Revenue or equivalent body.