Relief for Home Buyers
First Home Buyer Boost announced 14 October 2008
The Australian government recently announced a boost to help first home buyers.
By entering into a contract for a newly constructed home from 14 October 2008 until 30 June 2009 you may now be eligible for cash grants of up to $29,000 in regional areas or $26,000 for metropolitan areas. These grants comprise up to $15,000 in Victorian Government support and up to $14,000 in Australian Government support.
Even if you are buying an established home you may be eligible for up to $10,000 in Victorian Government grants and $7,000 in Australian Government grants.
For further information, visit www.sro.vic.gov.au 
First home buyers
In the 2008-09 Budget, the Victorian Government announced further measures to assist first home buyers. An additional $3,000 Regional First Home Bonus was introduced for first home buyers purchasing a newly constructed home in regional Victoria, in addition to the $7,000 First Home Owners Grant and the $5,000 Bonus available to newly constructed home purchase where contracts were entered into on or after 6 May 2008.
A newly constructed home is as defined in the GST law and includes substantial renovations to an existing dwelling.
The Bonus, in both forms, is available for properties valued at or below $500 000 and purchased as a home to live in (principal place of residence).
These one-off Bonuses are additional to the current $7000 First Home Owner Grant (FHOG) and brings the total grants available to Victorian first home buyers funded by the Victorian Government to $10 000 and $12 000 for established and new home purchases respectively, and up to $15 000 for new homes in regional Victoria.
Other home buyers
The Victorian Government recognises that strongly rising property values have made it particularly difficult for first homebuyers and families to purchase a home. In response, the Government announced the following relief in the 2008-09 Budget worth around $420 million over the next four years for Victorians purchasing a home:
- The stamp duty thresholds were increased by 10 per cent for contracts entered into on or after 6 May 2008;
- First homebuyers will be able to receive both the PPR stamp duty concession and the Bonus for the first time - a homebuyer purchasing a median first home ($317,000) will receive a $2,460 reduction in stamp duty, representing a 17 per cent cut;
- The pensioner and concession cardholders stamp duty thresholds were adjusted by 10 per cent; with a full exemption for property purchases valued up to $330 000 (previously $300 000) and a partial concession for property purchases valued up to $440 000 (previously up to $400 000).
The threshold adjustments represent the first major revision of the general stamp duty on land transfer thresholds in 10 years, benefiting over 100 000 homebuyers per year. Around 40 000 first home buyers are expected to benefit from these measures every year, with around 22,000 being exempt from paying stamp duty when the value of the PPR concession, the FHOG and the Bonus is combined.
These measures are expected to complement the success of the Bonus. Since its introduction in May 2004, around 140,000 first homebuyers have received the Bonus and Victoria has consistently had the highest proportion of home buyers that are first home buyers of any State.
This has led to the effective creation of two duty on land transfer rate scales: one for home buyers and another for standard property transactions (e.g. first home buyers, residential investors and commercial transactions).
Standard Duty Rates: Other Property Transactions
| Transfer of Real Property rates (For contracts entered into on or after 6 May 2008) |
| $0 - $25,000 | 1.4 per cent of the dutiable value of the property |
| $25,001 - $130,000 | $350 plus 2.4 per cent of the dutiable value in excess of $25,000 |
| $130,001 - $960,000 | $2,870 plus 6 per cent of the dutiable value in excess of $130,000 |
| More than $960,000 | 5.5 per cent of the dutiable value |
Duty Rates: Principal Place of Residence Purchases*
| Duty rates for a principal place of residence (for contracts entered into on or after 6 May 2008) |
| $0 - $25,000 | 1.4 per cent of the dutiable value of the property |
| $25,001 - $130,000 | $350 plus 2.4 per cent of the dutiable value in excess of $25,000 |
| $130,001 - $440,000 | $2,870 plus 5 per cent of the dutiable value in excess of $130,000 |
| $440,001 - $550,000 | $18,370 plus 6 per cent of the dutiable value in excess of $440,000 |
| $550,001 - $960,000 | $28,070 plus 6 per cent of the dutiable value in excess of $550,000 |
| More than $960,000 | 5.5 per cent of the dutiable value |
* First home buyers can now receive both the principal place of residence concession and duty reduction and the First Home Bonus.
For further information contact the State Revenue Office:
Phone: 13 21 61
Website:
www.sro.vic.gov.au 
Email:
sro@sro.vic.gov.au
