Top tips to save on stamp duty in Melbourne

When you might not pay stamp duty at all

You may not need to pay stamp duty if you meet the eligibility criteria for certain exemptions or concessions in Victoria. The state offers a first home buyer duty exemption for properties up to $600,000 and a concession for properties between $600,000 and $750,000. These aren't hidden or complicated, but they do have specific requirements around residency, occupancy, and whether you've owned property before.

Consider someone purchasing a unit in Reservoir for $580,000 as their first home. They plan to live there and meet the eligibility tests. Instead of paying around $30,000 in stamp duty, they pay nothing. That amount stays in their offset account or goes toward furniture, conveyancing, or building and pest inspections.

How the first home buyer exemption works in Victoria

For properties valued at or below $600,000, eligible first home buyers in Victoria pay no transfer duty. You must be a natural person, at least 18 years old, an Australian citizen or permanent resident. You can't have previously owned property in Australia, either alone or jointly, and you can't hold a relevant interest in residential property at the time of the transaction.

The property must become your principal place of residence within 12 months of settlement, and you must occupy it continuously for at least 12 months after moving in. If you're purchasing with someone else, each of you must meet all these conditions independently.

The concession tier between $600,000 and $750,000

If the property is valued between $600,000 and $750,000, a tapered concession applies instead of full exemption. The amount of duty you pay increases gradually as the value approaches $750,000. At $650,000, you might pay approximately $5,500. At $700,000, closer to $15,000. The same eligibility conditions apply as for the full exemption.

In areas like Coburg or Preston, where median unit prices sit closer to the upper threshold, this concession can still represent a saving of several thousand dollars compared to the standard rate. It won't eliminate the upfront cost entirely, but it reduces it enough to influence how much deposit you need and whether using parents as guarantors becomes necessary.

Off-the-plan purchases and duty concessions

Victoria offers an additional duty concession for off-the-plan purchases that meet specific criteria. This applies to new homes or substantially renovated homes purchased under an off-the-plan contract. The concession can apply in addition to the first home buyer exemption or concession, provided all conditions are satisfied.

The property must be newly built or substantially renovated, and construction must be completed within five years of the contract date. There are also requirements around the dutiable value and the proportion of the purchase price attributable to the land. If you're considering a new apartment in a development near Reservoir or Greensborough, this concession may reduce your upfront costs even further, particularly when combined with the Australian Government 5% Deposit Scheme.

What happens if circumstances change after settlement

The State Revenue Office monitors compliance with the occupancy requirements. If you don't occupy the property as your principal place of residence within 12 months, or if you move out before the 12-month occupancy period is complete, you may be required to pay the duty you were originally exempted from, plus penalty tax and interest.

Exceptions exist for genuine hardship or circumstances beyond your control, such as employment relocation, serious illness, or relationship breakdown. You need to apply to the State Revenue Office for a reassessment if this occurs. It's not automatic. In our experience, buyers who are unsure about job security or relationship stability should consider whether they can genuinely commit to the occupancy requirement before relying on the exemption.

How the exemption works alongside guarantor arrangements

If you're using a guarantor loan to avoid paying lenders mortgage insurance, you can still access the stamp duty exemption or concession provided you meet the eligibility criteria. The guarantor arrangement affects your loan structure, not your duty liability. The guarantor cannot hold an interest in the property you're purchasing. They provide security through their own property, but the title to your new home must be in your name alone or jointly with another eligible co-purchaser.

This distinction matters if you're weighing up whether to buy with a partner or have your parents take a share of the property. The latter would disqualify you from the exemption unless your parents also qualify as first home buyers, which is unlikely.

Buying with someone who isn't a first home buyer

If you purchase jointly with someone who doesn't meet the first home buyer criteria, the exemption or concession applies only to your share of the property. You'll pay duty on the other person's share at the standard rate. For a $600,000 property purchased with a 50/50 ownership split, you'd pay duty on $300,000 at the standard rate while your share attracts the exemption.

That can still represent a saving, but it's not as substantial as the full exemption. If you're considering a joint purchase with a partner who previously owned property, it's worth calculating the difference before you commit. The structure of your purchase affects not just the duty but also your borrowing capacity and ongoing repayment obligations.

Applying for the exemption or concession

You don't apply for the exemption separately. Your conveyancer or solicitor completes the transfer duty statement when lodging the transfer with the State Revenue Office. They'll include a declaration that you meet the eligibility criteria. You'll need to provide evidence such as your driver's licence, passport, proof of Australian citizenship or permanent residency, and a statutory declaration confirming you haven't previously owned property.

The assessment happens as part of the settlement process, so there's no separate waiting period. If you're uncertain whether you qualify, speak with your conveyancer before exchanging contracts. Assuming you're eligible and then discovering you're not can leave you short on settlement funds.

Call one of our team or book an appointment at a time that works for you. We'll walk through your circumstances, confirm which concessions or exemptions apply, and structure your home loan application to make the numbers work from day one.

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