First home owner duty with a family

The applicant(s) and their partner have:

  • never previously owned land, anywhere in Australia, which was used and occupied as their principal place of residence, and
  • not received this exemption/concession before, and
  • entered a contract where the value of the land and the dwelling purchased does not exceed $200,000, and
  • are first home owners with dependant children. First-home owners with a family may be eligible for a one-off exemption or concession from duty where their property (house and land) is valued at not more than $200,000.

Unless stated otherwise, all section numbers are references to the Duties Act  2000.

Associated and/or related persons (section 3)

Associated and/or related persons include, but are not limited to, relatives and related bodies corporate. Some examples include:

  • Spouses, domestic partners, parents, grandparents, children, aunts, uncles, nieces, nephews, adopted or step children of a person.
  • Business relationships including partnerships and companies who are related by common shareholders/directors.
  • Trusts and their beneficiaries or trusts with common beneficiaries.
  • Natural persons and companies where the person is the majority shareholder or director of that company or a related body corporate.

Evidence of value and purchase price

For sales involving nominations and for sales where the vendor and the purchaser are associated or related persons, the following must be produced with the Digital Duties Form:

  • Proof of payment of the purchase price, for example bank statements, loan agreements and  receipts.
  • Evidence of the market value of the property:
    • a letter of appraisal from a licensed real estate  agent, or
    • a valuation by a certified practising valuer who is a member of the Australian Property Institute or by a member of the Real Estate Institute of Victoria with sworn valuer accreditation.

First home owner exemption/concession and eligible first home owners (section 61 – 63B)

To qualify as an eligible first home owner, an applicant(s) must:

  1. Have purchased land/property where the aggregate value of the land and building is:
    1. not more than $150,000 – full exemption,
    2. more than $150,000 but not more than $200,000 – partial concession on a sliding scale, or
    3. $200,000 or more – no exemption or concession.

Where there is an existing dwelling on the land at the time of the contract, the relevant value is the consideration or the unencumbered value of the land and dwelling, whichever is the greater.

Where there is no dwelling on the land at the time of the contract but a dwelling is constructed on the land within three years after the transfer, the relevant value is the consideration or the unencumbered value of the land, whichever is the greater, plus the construction cost of the dwelling. The first home owner exemption/concession will be provided only upon completion of the dwelling.

  1. Be a bona fide purchaser of land/property for adequate consideration,

The concession is only available to genuine purchasers for adequate consideration. The payment of adequate consideration is an eligibility requirement for the principal place of residence (PPR). This ensures that duty relief is available only to purchasers who provide full consideration for a property purchased (or fractional interest purchased) and not to those who have already benefited by purchasing at a heavily discounted price or have received the property as a gift.

And, an applicant(s) and their partner must intend to reside in a dwelling on the land as their principal place of residence, and:

  1. Have a child at the time of making this declaration,
  2. Have had a dependent child,
    1. if there was a dwelling on the land when the of sale was entered into – at the date of the of sale, or within months of that date,or
    2. if there was no dwelling on the land when the of sale was entered into – at the date of the building or the date on which building commenced (whichever is the earlier), or within months of that date.

A ‘dependent child’, in relation to a person, means a child under the age of 18 who is in the custody, care and control of, and ordinarily resident with, the person.

And, an applicant(s) and their partner must not have previously held an estate in fee simple in land anywhere in Australia on which was a dwelling which was their principal place of residence.

Land use entitlement (section 10(1)(a)(v))

A land use entitlement is an entitlement to occupy land in Victoria conferred through an ownership of shares in a company or units in a unit trust scheme, or a combination  of a shareholding or ownership of units together with a lease or licence.