First Home Buyers in Victoria: A Complete Legal Guide

Victorian first-home-buyer duty relief

Land transfer duty is charged under Chapter 2 of the Duties Act 2000 (Vic) on dutiable transactions in dutiable property and is administered by the State Revenue Office of Victoria. First-home-buyer relief in Part 5 of Chapter 2 provides a full exemption where the dutiable value of the home is $600,000 or less, and a tapered concession that reduces on a sliding scale for dutiable values between $600,001 and $750,000. No first-home-buyer relief is available at or above $750,000. The relief applies equally to new and established homes — there is no separate first-home-buyer threshold for new construction; the different treatment of new homes comes from the First Home Owner Grant and the off-the-plan concessions, not from the duty threshold.

Eligibility is tested for each purchaser. On the SRO's current published test (page updated 10 July 2026), each purchaser must be a natural person, at least 18 years of age (subject to a limited Commissioner's discretion), an Australian citizen or permanent resident at the time of the contract, and must buy the property at market value as their principal place of residence. The buyer, and any spouse or domestic partner, must not already have owned a home or other residential property in Australia (whether jointly, separately, or with another person). Limited historical exceptions in the Act may apply — for example where a prior interest was not occupied as a home for the applicable period specified by the Act, or in specific relationship or deceased-estate circumstances — but those exceptions are narrow, precise and should be checked against the current SRO position before assuming they apply.

At least one purchaser must occupy the home as their principal place of residence for a continuous period of 12 months commencing within 12 months of settlement (for an existing or new home). For a purchase of vacant residential land where a separate build contract is used, dutiable value for the first-home-buyer test is generally the land value only, the building contract is not included, and occupation must commence by the earlier of 12 months after the occupancy permit and 36 months after settlement of the land, followed by the 12-month continuous residence period. A single house-and-land contract that includes both land and build is treated differently, and the specific SRO treatment turns on the character of the contract.

A foreign co-purchaser attracts foreign purchaser additional duty (currently 8%) on their interest under Chapter 2 Part 4B of the Duties Act 2000 (Vic), calculated in addition to ordinary duty. A foreign co-purchaser may also mean the transaction fails to satisfy the citizen-or-permanent- resident requirement, so first-home-buyer relief cannot be assumed to remain available household-wide where an ineligible purchaser is on title.

Duty relief is not a cash payment: the exemption or concession must be claimed by lodging the Digital Duties Form and supporting evidence, and is reflected in the duty assessment at settlement. If the residence requirement is not met, or eligibility is later determined to be incorrect, the SRO reassesses duty and may impose interest and penalty tax under the Taxation Administration Act 1997 (Vic).

The off-the-plan duty concessions

Two off-the-plan concessions operate in parallel and must be distinguished. The ordinary off-the-plan concession in section 21 of the Duties Act 2000 (Vic) reduces the dutiable value of an eligible off-the-plan strata purchase by the value of construction and refurbishment work performed on or after the contract date, and applies to a purchaser who will occupy the property as their principal place of residence (including an eligible first home buyer) subject to the ordinary dutiable-value caps set by the Act. It is an ongoing concession, not tied to a temporary window.

The temporary broadened off-the-plan concession applies to eligible contracts entered into on or after 21 October 2024 and before 21 April 2027. Eligibility depends on the contract date, not the settlement date. The relevant property must be an off-the-plan dwelling in a strata subdivision with common property — it does not cover an ordinary house-and-land package outside such a subdivision. There is no property value threshold and it is open to all purchaser types (including investors, companies and trusts), not only first home buyers or owner-occupiers. Like the ordinary concession, it works by reducing dutiable value by the value of construction and refurbishment performed on or after the contract date. Importantly, the temporary concession does not reduce foreign purchaser additional duty — FPAD continues to be calculated on the pre-concession dutiable value.

Both concessions are claimed on the Digital Duties Form with builder-certified evidence of the value of construction/refurbishment performed on or after the contract date, and the SRO may reassess if either concession is wrongly claimed. Where more than one concession is technically available, the assessment applies the correct concession for the transaction. See our off-the-plan property purchases guide for the detail.

First Home Owner Grant

The Victorian First Home Owner Grant is provided under the First Home Owner Grant and Home Buyer Schemes Act 2000 (Vic). It is a $10,000 grant for eligible first home buyers of a new home in Victoria with a total value (contract price plus, for a contract to build, the value of the land, or the consideration for a purchase of a new home) not exceeding $750,000.

The grant is available only for a new home — one that has not previously been sold as a place of residence and has not been occupied as a place of residence (including under a lease, licence or short-term stay arrangement) for a continuous period of 12 months or more since being built. Eligible transactions include contracts for the purchase of a new home, comprehensive home-building contracts entered into with a registered builder, and owner-builder arrangements where the applicant constructs the home; the Act sets specific rules for each. Established homes do not qualify, regardless of the extent of renovation.

Each applicant must be a natural person aged 18 or over (subject to a limited Commissioner's discretion), at least one applicant must be an Australian citizen or permanent resident, and the applicants (and any spouse or domestic partner) must not previously have received an FHOG in any Australian jurisdiction and must not previously have owned residential property in Australia in a way that disqualifies them under the Act. The FHOG prior-ownership and prior-occupation tests are set by the First Home Owner Grant and Home Buyer Schemes Act 2000 (Vic) and are not identical to the SRO's current statement of the first-home-buyer duty-concession test. At least one applicant must occupy the home as their principal place of residence for a continuous period of 12 months, commencing within 12 months of settlement for a contract of purchase, or within 12 months of the date of the occupancy permit for a contract to build or an owner-builder home. Australian Defence Force personnel enrolled in Victoria and unable to satisfy the residence requirement due to service may apply for the ADF exemption under the Act.

Applications are made through an SRO-approved agent (typically the incoming lender) or directly to the SRO where no approved agent is involved (including for owner- builders). Payment timing depends on the transaction and application channel and on the relevant scheme milestone — for a purchase, payment is generally made at settlement through an approved agent; for a contract to build, generally on payment of the first progress payment after laying of foundations; for an owner-builder, on completion of the home. The FHOG is a separate entitlement from duty relief — a first home buyer of an established home may qualify for the duty exemption but cannot receive the FHOG, while a buyer of a new home may qualify for both if independently eligible. The SRO may recover the grant with interest and penalty tax if eligibility fails or the residence requirement is not met.

Federal home-buyer assistance

The Australian Government 5% Deposit Scheme. The Commonwealth's deposit-guarantee program (formerly known as the Home Guarantee Scheme) has operated since 1 October 2025 as the Australian Government 5% Deposit Scheme, administered by Housing Australia under the Housing Australia Act 2018 (Cth) and the applicable Investment Mandate. Under the scheme, the Commonwealth guarantees part of an eligible loan to a participating lender so a buyer with less than the ordinary 20% deposit can avoid Lenders Mortgage Insurance while scheme requirements are maintained. As at 22 July 2026 the operative settings are:

• first home buyers (including buyers treated as first home buyers because they have not owned Australian property or land in the previous 10 years) generally require a minimum 5% deposit;
• eligible single parents and single legal guardians generally require a minimum 2% deposit;
• no income caps apply;
• places are unlimited, with no waiting list;
• no Lenders Mortgage Insurance is payable while scheme requirements are maintained;
• applicants must be Australian citizens or permanent residents aged at least 18;
• the loan must be an owner-occupier principal-and-interest loan from a participating lender, subject to the lender's own credit assessment under the National Consumer Credit Protection Act 2009 (Cth);
• the property must be at or below the location-specific price cap set by Housing Australia (buyers should check the current Housing Australia postcode/cap tool for their location — those caps change and no obsolete figures are quoted in this guide);
• applications are made through a participating lender, not directly to Housing Australia.

The Commonwealth guarantees the lender, not the buyer. The buyer remains fully liable for loan repayments and any other loan costs. Loss of eligibility (for example on ceasing to occupy the property as required, or on refinancing outside the scheme) may expose the buyer to LMI or other lender consequences under the loan contract. Historical scheme names (First Home Guarantee, Regional First Home Buyer Guarantee and Family Home Guarantee) may still appear in older material; the current public program is the single 5% Deposit Scheme described above.

Help to Buy. Help to Buy is a separate Commonwealth shared-equity scheme, established by the Help to Buy Act 2024 (Cth) and operational as at 22 July 2026. Applications are made through participating lenders. On current official settings, an eligible buyer contributes a minimum 2% deposit and the Commonwealth takes an equity contribution of up to 30% for an existing home or up to 40% for a newly built home. There are 10,000 places each year. Applicants must be Australian citizens aged at least 18, with taxable income (using the current indexed FY 2026 settings) no more than $103,000 for an individual or $165,000 for joint applicants and single parents. Applicants generally cannot own or beneficially own any other property, subject to stated scheme exceptions. The home must be occupied as the applicant's principal place of residence, and there are ongoing review and insurance obligations while the equity contribution remains outstanding. Help to Buy cannot be combined with specified other government loans, guarantees or shared-equity purchase assistance (including the 5% Deposit Scheme), although state duty concessions and grants may remain available where their own eligibility rules are met. Victorian price caps are currently $950,000 for Melbourne and Geelong and $650,000 for the rest of Victoria, subject to the official postcode tool. The Commonwealth shares proportionately in any gain or loss on the property, and its equity must ultimately be repaid, bought out or accounted for on sale; the Commonwealth's interest is secured through the scheme documents (typically a second mortgage). Help to Buy is fundamentally different from the 5% Deposit Scheme — it is an ongoing equity interest of the Commonwealth in the buyer's home, not a guarantee to a lender.

Victorian Homebuyer Fund. The Victorian Homebuyer Fund shared-equity scheme is closed to new participants as at 22 July 2026. Current SRO material records that the Fund was extended beyond its original 30 June 2025 cut-off and remained open to new applications until the total allocation was exhausted; it now continues only for existing participants under the Fund's ongoing terms.

Contracts, cooling-off and deposits

The standard Contract of Sale of Land in common use in Victoria is a well-tested contract, but its protection depends on the general and special conditions actually in the signed document. Every contract should be read alongside its section 32 vendor statement before signing. Section 31 of the Sale of Land Act 1962 (Vic) gives a residential purchaser three clear business days from the day of signing to end the contract by written notice to the vendor or the vendor's agent, in which case the vendor may retain $100 or 0.2% of the price, whichever is greater. Cooling-off does not apply where the land was sold at, or by a contract signed within three clear business days before or after, a publicly advertised auction of the same land; where the purchaser is an estate agent or a body corporate; where the land is used primarily for industrial or commercial purposes; where the land is more than 20 hectares used primarily for farming; or where the purchaser has previously signed a contract for the sale of the same land in substantially the same terms. See our cooling-off guide for detail.

Deposits on existing residential land are capped by section 2AA of the Sale of Land Act 1962 (Vic) at 10% of the price; deposits on off-the-plan land are similarly restricted. Section 27 allows a vendor to seek release of the deposit before settlement by serving a prescribed statement setting out particulars of any mortgage and outgoings on the land. If the statutory particulars are met and the purchaser does not deliver a valid written objection within the period fixed by section 27, the deposit becomes releasable; objection is possible on the grounds provided by the section and the process and consequences are technical. Legal advice should be obtained before signing or responding to a section 27 statement. Deposit bonds and bank guarantees are contractual alternatives that require the vendor's acceptance in the contract.

Finance pre-approval is a conditional lender indication and does not by itself protect a purchaser who cannot complete. A subject-to-finance clause must nominate the lender, the approved amount, a latest date for approval and a clear written notice mechanism if approval is not obtained; a clause that lapses or is not exercised strictly in accordance with its terms leaves the buyer bound. Auction purchases (and private sales caught by the auction exclusion) are unconditional — finance must be in place before bidding.

Section 32 disclosure and due diligence

The vendor's statement under section 32 of the Sale of Land Act 1962 (Vic) must be signed by the vendor and given to the purchaser before the purchaser signs the contract. Required disclosures include financial matters (rates, land tax assessed under the single-holding rule, owners corporation fees and other outgoings), insurance where the vendor is at risk, title particulars including registered and known unregistered easements, covenants and other restrictions and any planning-scheme restriction, planning zone and overlays, growth areas infrastructure contribution details, building permits issued in the past seven years and owner-builder works and any required domestic building insurance, notices, orders, declarations, reports and recommendations of a public authority or government department affecting the land, particulars of connected services, owners corporation information for lots affected by an owners corporation, and matters relating to bushfire-prone areas.

Under section 32K the purchaser may rescind the contract before accepting title or taking possession where the vendor has supplied false information, failed to supply required information or otherwise failed to comply with Division 2 of Part II. The vendor may defend on the basis that the vendor acted honestly and reasonably in the circumstances and the purchaser is substantially in as good a position as if there had been full compliance — a defence that is applied narrowly. Independent title, planning, water, land tax and (for strata) owners corporation searches remain essential; the vendor's statement is a disclosure floor, not a guarantee of the underlying facts.

Building and pest inspections

Victoria applies a caveat emptor approach to residential sales: the purchaser takes the property as it stands subject only to the actual contents of the section 32 statement and any express representations or warranties in the contract. There is no implied warranty of habitability or soundness in the sale of an existing residence. A pre-purchase inspection by a suitably qualified building consultant (typically a registered building practitioner) and a separate pest inspection by a suitably qualified pest inspector should therefore be undertaken before bidding at auction and before signing a private sale contract. Reports are limited by their access, scope and express exclusions — buyers who intend to rely on inspection outcomes should ensure a properly drafted special condition, not standard wording.

New builds and off-the-plan

New homes and off-the-plan purchases involve additional legal frameworks. A comprehensive home-building contract for domestic building work must comply with the Domestic Building Contracts Act 1995 (Vic), which regulates the form of the contract, deposit limits, progress payments, variations, cost-plus arrangements and cooling-off within that regime, and separately restricts a builder from demanding or receiving money under a major domestic building contract where required insurance has not been obtained. Compulsory practitioner-based domestic building insurance is a separate framework under Division 3 of Part 9 of the Building Act 1993 (Vic), including s 135 and the Domestic Building Insurance Ministerial Order in force from time to time. Under the current consumer threshold in that order, cover is generally required where the contract price for the domestic building work is more than $16,000, subject to prescribed exceptions and excluded categories of work; the exact threshold, excluded work and any exemptions turn on the ministerial order in force at the time of the contract and must be reconfirmed with the Victorian Building Authority — do not assume every new build attracts identical cover. Where cover is required, the owner should receive and check the project-specific certificate of domestic building insurance naming the site and the works before paying a deposit or the builder commencing work. Domestic building insurance is not general defects insurance: it is last-resort cover triggered only in specified circumstances such as the death, disappearance or insolvency of the registered builder, subject to the policy terms and the applicable statutory limits. Builder registration under the Building Act 1993 (Vic) should be verified with the Victorian Building Authority.

For off-the-plan strata purchases, section 9AC of the Sale of Land Act 1962 (Vic) gives the purchaser a limited window to rescind on a material amendment to the plan of subdivision that will materially affect the lot. Section 10A restricts a vendor from rescinding under a sunset clause without the purchaser's written consent or a Supreme Court order under the Act. Owners corporation information disclosed under section 32 should be checked carefully — initial budgets, insurance and rules materially affect ongoing cost. Valuation shortfalls between contract and completion, and any decline in finance availability over the construction period, must be planned for; there is no automatic price adjustment.

A grant, exemption or concession available at signing is not automatically available at completion. The SRO and Housing Australia settings that apply are generally those in force at the relevant statutory time, but this varies by scheme and by amendments to the underlying program; buyers should not assume continuity and should reconfirm eligibility before settlement.

Ownership and financing structure

Two or more purchasers may hold as joint proprietors (with the right of survivorship) or as tenants in common (in specified shares that pass under a will or on intestacy). The choice has consequences for succession, family law, insolvency and taxation. Where contributions to purchase are unequal, or where a family member contributes, a written co-ownership agreement should record the parties' intentions — including how mortgage repayments and outgoings are shared, what happens if one party wants to sell, and how any contribution is to be characterised (as a gift or a loan). Undocumented family contributions can create resulting or constructive trust arguments in a later dispute. Guarantors and lenders both require disclosure of true beneficial arrangements; failing to disclose the true beneficial arrangement to a lender risks credit and statutory consequences.

Lenders Mortgage Insurance is a product that protects the lender against loss on default; although generally paid by the borrower, it does not insure the borrower. Loan approval, valuation and responsible-lending assessment under the National Consumer Credit Protection Act 2009 (Cth) remain the lender's responsibility and are separate from any government scheme; scheme eligibility does not by itself entitle the buyer to a loan.

Settlement, insurance and adjustments

Victorian residential settlement is conducted electronically under the Electronic Conveyancing National Law (Victoria) through PEXA. The purchaser's practitioner completes verification of identity and client authorisation, prepares settlement adjustments (rates, water and owners corporation fees; land tax adjustment is prohibited by section 10G of the Sale of Land Act 1962 (Vic) for the residential purchases to which that section applies), lodges the Digital Duties Form with any first-home-buyer, PPR or off-the-plan concession claim, coordinates with the lender and vendor's practitioner in PEXA, and settles on the scheduled day. See our PEXA guide and settlement adjustments guide. Cyber-fraud controls (independent verification of trust account details, scepticism of any late change of banking instructions and secure channels) should be applied throughout.

Risk allocation depends on the contract. Under the general conditions in common use in Victoria for residential sales, risk in the property ordinarily remains with the vendor until settlement. However, the purchaser has an insurable interest from signing, the contract or the incoming lender may require the purchaser to insure earlier in defined events, and the purchaser bears the residual risk of an uninsured vendor. Buyers should arrange building insurance in accordance with the contract, the lender's requirements and their own risk assessment. Strata buyers rely on owners corporation insurance for the building itself and should arrange contents cover for their own possessions.

On buyer default, exposure is not limited to loss of the deposit. The vendor may claim penalty interest under the contract, sue for specific performance or terminate and claim damages, and on resale can pursue any shortfall (together with costs and holding costs) in addition to deposit forfeiture. Legal review before signing is the single most effective way to avoid this exposure.

Costs and practical sequence

Beyond the deposit and loan, first home buyers should budget for land transfer duty (subject to any first-home-buyer, PPR or off-the-plan relief), legal or conveyancing fees, statutory searches and certificates, building and pest inspections, loan establishment and valuation fees, Lenders Mortgage Insurance where applicable (or use of the Australian Government 5% Deposit Scheme or Help to Buy if eligible), settlement adjustments, first-year insurance, connection costs and moving expenses. Total non-deposit costs vary widely depending on the property, its location and the transaction and should be scoped for the particular purchase; no universal percentage estimate should be relied on.

The practical sequence is generally: obtain finance pre-approval; identify the target property; obtain the section 32 statement and contract and instruct a lawyer to review; complete building and pest inspections and any planning or title enquiries; negotiate any amendments and special conditions before signing; sign only after review and understanding of the contract; where cooling-off is available, use the window carefully; refresh finance pre-approval as needed; conduct a pre-settlement inspection; settle through PEXA; and satisfy the occupation and any FHOG conditions post-settlement. Legal review before signing — including before bidding at auction — is the single step most likely to prevent expensive problems later.

Speaking with Parke Lawyers

Parke Lawyers' property and conveyancing team acts for first home buyers across Melbourne and regional Victoria. We review section 32 statements and contracts before signing, advise on first-home-buyer duty relief, the FHOG and the off-the-plan concessions, coordinate with lenders for Australian Government 5% Deposit Scheme and Help to Buy transactions where applicable, and manage settlement through PEXA. See our conveyancing and property services page, contact Julian McIntyre directly, or read our related guides on easements, restrictive covenants and owners corporation disputes.

Frequently Asked Questions