Buying a home in Victoria is feeling out of reach for many first home buyers.
Median house prices in Melbourne have risen by 67% in the decade to June 2023. Metropolitan Melbourne house prices rose to $820,000 and unit prices to $600,000 for the June Quarter 2023.
In regional Victoria, the median sale price of housing almost doubled, from $282,500 to $560,000 from 2013 to 2023. At the same time, unit prices in regional Victoria rose 71%, from $245,000 to $420,000.
Home ownership rates have dropped from 71% to 68% of Victorian households from 2001 to 2021. The Government has introduced some changes to make it easier for first home buyers to buy a home.
What we’ve already done
Victorian Homebuyer Fund shared equity scheme
If you're struggling to save for a home deposit, the Victorian Homebuyer Fund could be the key to owning your home sooner.
If you have a 5% deposit, the Victorian Government will contribute up to 25% of the purchase price, in exchange for an equivalent share in the property, which can reduce your mortgage. Plus, no Lenders Mortgage Insurance.
Stamp duty removed or reduced
We abolished stamp duty if you’re a first home buyer and buying a house for $600,000 or less.
If you’re buying a home for between $600,000 and $750,000 we’ve tapered the stamp duty. It is zero at $600,000 then increases slightly as the cost of the home increases to $750,000.
Young Victorian farmers will continue to be eligible for a stamp duty concession on the purchase of their first farm.
The State Revenue Office looks after stamp duty for first home buyers.
Changed stamp duty concession for off the plan purchases
In Victoria, if you buy off the plan, you only pay stamp duty on the land the property is sitting on.
Until July 2017 this applied to investors as well as people who planned to live in the finished building. The concession was called the OTP concession.
The concession is now only available if you are buying the property as your main home, or if you qualify for first home buyer stamp duty concessions. It is now called the PPR OTP concession. PPR stands for principal place of residence.
The State Revenue Office manages the PPR OTP concession.
Exemption from residency requirements for defence force members
Members of Australia’s Defence Forces may not meet the residency criteria for the First Home Owners Grant if they are deployed to other states or overseas.
From 27 June 2017 current members of the Australian Army, Air Force or Navy are exempt from the residence requirements.
The exemption applies to current members of the Australian Army, Air Force or Navy who are enrolled to vote in Victorian elections and are either on duty or leave. The exemption does not apply to Australian Army, Air Force or Navy reservists or to Australian Public Service staff.
The State Revenue Office manages the residency exemption for members of the defence forces applying for the First Home Owners Grant.
First Home Owner Grant
A $10,000 First Home Owner Grant is available when you buy or build your first new home.
Visit the First Home Owner Grant application page on the State Revenue Office website to see if you are eligible.
Land tax on vacant residential properties
We hope to free up more opportunities for first home buyers with a land tax on vacant residential properties.
The State Revenue Office manages Vacant Residential Land Tax.
Buy Assist – community shared equity scheme
Buy Assist will help individuals or households on a low to medium income to buy a home. The eligibility criteria will be similar to the requirements for a bank loan.
We expect to help deliver up to 100 shared equity homes in Victoria.
Buy Assist is like the HomesVic scheme. Where HomesVic is a government initiative, Buy Assist is a private sector model built around partnerships with developers.
What’s coming
First home buyer opportunities in the city and urban renewal precincts
We are creating opportunities for first home buyers to buy in the inner city by creating new urban precincts.
We also have a target of at least 10% of all properties in Government-led developments for first home buyers.
In private developments, especially those close to jobs and transport, we are consulting with first home buyers, industry and the community to help us support first home buyers.
Check the Victorian Planning Authority (VPA) website for updates on urban renewal precincts.
New laws about underquoting in the real estate industry
When properties are advertised for auction at a lower price than the real estate agent knows they will fetch on the day, it is called underquoting.
New legislation means that real estate agents need to follow strict rules about how to estimate property prices. Consumer Affairs Victoria may ask real estate agents to prove how they arrived at the estimated price.
These reforms are backed by the Real Estate Institute of Victoria.
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