Stamp duty in Victoria: what a first home buyer actually pays in 2026 (with the maths)
Nothing under $600,000, a sliding scale to $750,000, and the full bill above that. Worked examples at $600k, $650k, $700k and $900k, plus the off-the-plan concession that runs to April 2027.
Every week someone sits in my office with a pre-approval letter, a deposit they have spent four years saving, and a stamp duty figure from an online calculator that is wrong by $15,000.
Not because the calculator is broken. Because they fed it the wrong question.
So here is the right question, the actual arithmetic, and the three places people get caught.
The general rate first
Victorian land transfer duty is a sliding scale on the price (technically the “dutiable value”, which is the higher of price and market value). For most Melbourne purchases the relevant band is this one:
| Dutiable value | Duty |
|---|---|
| $130,001 to $960,000 | $2,870 plus 6% of the amount over $130,000 |
| $960,001 to $2,000,000 | 5.5% of the whole value |
| Over $2,000,000 | $110,000 plus 6.5% of the amount over $2,000,000 |
On a $900,000 home that is $2,870 + 6% × $770,000 = $49,070. Keep that number in mind; it is what the exemption is worth.
The first home buyer rules
Three tiers, and the boundaries are hard:
The sliding scale is simpler than it looks. Take the full duty, then multiply it by how far you are into the $150,000 band:
Duty payable = full duty × (price − $600,000) ÷ $150,000
Worked through, with the full duty beside it so you can see what the concession is worth at each point:
Read it the way the market does. A first home buyer at $600,000 saves $31,070. At $700,000, the saving has shrunk to $12,357. By $750,000 it is gone, and from $750,001 the duty on a $900,000 house is the full $49,070 whether it is your first home or your fifth.
If you are choosing between a $740,000 apartment and a $790,000 townhouse, the difference is not $50,000. It is $50,000 plus roughly $40,000 of duty you would otherwise not pay. Buyers who understand this set their ceiling at $749,000 and negotiate hard. Vendors in that band know it too.
The three traps
1. “First home buyer” means first home ever, for both of you. The test is whether you or your spouse or partner have previously owned or held a relevant interest in residential property anywhere in Australia. Not “first home in Victoria”. Not “first home we lived in”. An investment unit a partner bought in Brisbane in 2014 and sold in 2017 can knock out both of you. The SRO checks. Tell us about every property either of you has ever had an interest in, including inherited ones, before you bid.
2. The residence requirement is 12 months, continuous, and starts within 12 months of settlement. Renting the property out “for a year first” and then moving in does not comply. Neither does buying in February, moving in by the following February, and moving out in September. If a job transfer or relationship change forces a move, contact the SRO; there are hardship provisions. What you must not do is stay quiet, because the SRO reassesses the duty with penalty tax and interest when it finds out, and it does.
3. Duty is a settlement-day cost, not a loan cost. Lenders lend against the property, not against the tax. On a $700,000 purchase with a 10% deposit, a first home buyer needs $70,000 for the deposit, $24,713 for duty, and the transfer registration and conveyancing costs on top. Many buyers discover the duty line when the settlement statement arrives. Ask for the figure in writing at the start, and put it in the budget before you put in an offer.
New homes: the two extra levers
If you are buying new, two more things apply.
The First Home Owner Grant is $10,000 for a new home (never previously occupied or sold as a place of residence) with a value up to $750,000. It is paid at settlement, usually through your lender. It does not reduce duty; it is cash.
The temporary off-the-plan concession is the bigger one. For strata apartments, units and townhouses bought off the plan, the dutiable value is reduced by the construction costs incurred after you sign the contract. On a $700,000 apartment where 60% of the build happens after contract, the dutiable value might fall to around $280,000 and the duty with it. The concession was due to end on 21 October 2026 and the 2026-27 State Budget extended it to 21 April 2027, subject to legislation passing. It applies whether or not you intend to live in the property, which makes it the most valuable duty concession available to an investor right now. The arithmetic is done by the SRO from the developer’s figures, so insist on seeing the calculation before you sign, not after.
What I tell first home buyers
- Get the duty figure in writing before you make an offer. From your conveyancer, not from a calculator. Include every property either of you has ever had an interest in.
- Decide whether $750,000 is your ceiling. It is the most important number in the market for a first home buyer in Melbourne. Decide on purpose.
- If you are buying new, ask for the off-the-plan calculation. Before 21 April 2027, the saving can be larger than the deposit.
- Budget duty as cash at settlement. It is not the bank's problem.
The exemption was designed to be generous to people buying their first home at the lower end of the market. It is. The mistake is assuming it tapers gently. It does not. It falls off a cliff at $750,000, and the best thing a first home buyer can do is know exactly where the edge is.
Questions people ask
Can I use the first home buyer duty exemption if I have owned an investment property?
Generally no. The exemption and concession require that you (and your partner) have not previously owned or held a relevant interest in residential property in Australia, with limited exceptions. If a spouse or partner has owned property, that can disqualify both of you. Check your position with the State Revenue Office before you bid.
Do I have to live in the property to get the exemption?
Yes. You must occupy the home as your principal place of residence for a continuous period of 12 months, starting within 12 months of settlement. If your circumstances change, tell the SRO; there are provisions for genuine hardship, but silence is treated as a breach.
When is stamp duty actually paid?
At settlement. In an electronic settlement through PEXA the duty is paid to the State Revenue Office as part of the settlement funds, so it must be in your account on the day, not after. Lenders will not usually lend it to you.
Sources and further reading
- State Revenue Office Victoria: first home buyer duty exemption, concession and reduction
- State Revenue Office Victoria: land transfer (stamp) duty rates
- State Revenue Office Victoria: temporary off-the-plan duty concession
- Sladen Legal: Victorian State Budget 2026-27 (off-the-plan concession extended to 21 April 2027)
Have a question about your own situation?
Fifteen minutes on the phone with us, free and without obligation. By the end of it you know whether it is a matter for us and what the next step is.
This article is general information about the law in Victoria as at 5 November 2026. It is not legal advice and does not take your circumstances into account. The law changes; check the date, and get advice before you act.
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