First-home buyers in Victoria who sign contracts to purchase their first homes with a 60-day settlement now stand to benefit from increased stamp duty concessions that formally begin on January 1, 2013.
Savings will range from around $2,000 to just over $3,000 depending on the value of the home they purchase.
In addition, the first-home buyers' grant of $7,000 remains in place in Victoria for both new and established first-home purchases.
Real Estate Institute of Victoria chief executive Enzo Raimondo says many first-home buyers may not realise that homes bought as of last weekend (November 3) with 60-day settlements will be eligible to benefit from the lower stamp duty because they pay stamp duty when settlement of their purchase occurs, not when they sign a contract.
“Settlement occurs on the day the balance of the purchase price is paid and the property’s title document is handed over to the buyer.
“This means that if you are buying your first home right now, you meet the eligibility criteria and your settlement date is 1 January or later, you will be eligible for the 30% discount on stamp duty.
“This is unlike the first-home buyer grant, which applies from the date the contract is signed."
From January 1 the Victorian government will increase the current 20% discount is to 30% up to a total purchase price of $600,000.
Currently a home bought by a first-home buyer price at just under $600,000 is eligible to pay stamp duty of $24,808.
This decreases to $21,701 from January 1 – a savings of $3,101.
The stamp duty cut increases to 40% on January 1, 2014 and then to 50% on September 1, 2014.
The first-home buyers’ grant of $7,000 remains available for all those buying their first home for $750,000 or less. The grant is paid by the state government and has no scheduled end date.
Raimondo says other key criteria for the stamp duty cut are that the total purchase price must not be over $600,000, it must be a first home and the buyers must live in it as their primary place of residence.
“If you are looking to purchase at the moment, it is sensible to establish your eligibility with the State Revenue Office before you commit to a purchase. The first step is to look at the information at the SRO website.
“Overall, the cut is good news for those buying their first home and it will be worth an additional $2,377 on a home valued at $530,000. This will bring the total stamp duty cut on the median priced home from $4,754 to $7,131,” Raimondo says.