Reduction Of Duty For Eligible First Home Buyers
A 50% discount on the amount of Duty payable was legislated, with it being brought in gradually over a few years.
This applies for dutiable transactions with a settlement date on or after 1 July 2011 and valued at not more than $600,000.
To be eligible for the duty reduction, the first home buyer must:
- Be purchasing a principal place of residence (PPR).
- Have received or be entitled to receive the First Home Owner Grant.
- Must reside in the property for a continuous period of 12 months commencing within 12 months of settlement.
The schedule for the introduction of this discount was:
- 20 per cent reduction on 1 July 2011.
- 10 per cent reductions on 1 January 2013.
- 10 per cent reduction on 1 July 2013.
- 10 per cent reduction on 1 September 2014.
The final 10% discount on Stamp Duty comes into effect in September 2014, bringing the discount to 50%.
Duty rates from the Victoria Office of State Revenue
For dutiable transactions settled on or after 1 January 2013 and before 1 July 2013
Dutiable value of the PPR : Reduced rate of duty
$ 0 – $ 25,000 (1.4% of the dutiable value of the property) less 30%
$ 25,000 to $130,000 ($350 plus 2.4% of the dutiable value in excess of $25,000) less 30%
$130,000 to $440,000 ($2870 plus 5% of the dutiable value in excess of $130,000) less 30%
$440,000 to $550,000 ($18,370 plus 6% of the dutiable value in excess of $440,000) less 30%
$550,000 to $600,000 ($28,070 plus 6% of the dutiable value in excess of $550,000) less 30%
For dutiable transactions settled on or after 1 July 2013 and before 1 September 2014
Dutiable value of the PPR : Reduced rate of duty
$ 0 – $ 25,000 (1.4% of the dutiable value of the property) less 40%
$ 25,000 to $130,000 ($350 plus 2.4% of the dutiable value in excess of $25,000) less 40%
$130,000 to $440,000 ($2870 plus 5% of the dutiable value in excess of $130,000) less 40%
$440,000 to $550,000 ($18,370 plus 6% of the dutiable value in excess of $440,000) less 40%
$550,000 to $600,000 ($28,070 plus 6% of the dutiable value in excess of $550,000) less 40%
Figures copied from http://www.sro.vic.gov.au
My calculations from the above:
- A $450,000 house purchased in March 2013 would pay $13,279 ($18,370 plus 6% of the value over $440,000) less 30%
- A $450,000 house purchased in March 2014 would pay $11,382 ($18,370 plus 6% of the value over $440,000) less 40%
- A $450,000 house purchased in March 2014 would pay $9,485 ($18,370 plus 6% of the value over $440,000) less 50%
27.1 - 811,540