Victoria's $600k stamp duty threshold: the most important number for Melbourne first home buyers

If you are buying your first home in Victoria, one number matters more than almost any other on your contract: $600,000. Below that price, an eligible first home buyer pays no stamp duty at all. A dollar above, and duty starts creeping back in. By the time the price hits $750,000, the full first home buyer concession disappears entirely. That single threshold quietly reshapes how much Melbourne first home buyers actually pay, which suburbs make sense, and how much room there is to negotiate.

How the Victorian first home buyer stamp duty concession works

Victoria offers a three-tier structure for eligible first home buyers, and unlike some other states it applies to both new and established homes.

• Up to $600,000: full exemption. Stamp duty is zero.
• $600,001 to $750,000: a sliding concession that scales the duty up smoothly. You still pay something, but far less than the standard rate.
• $750,001 and above: no first home buyer concession applies. You pay the same duty as any other buyer.

Eligibility follows the standard Victorian rules: you must be an individual (not a company or trust), it must be your principal place of residence for at least twelve continuous months starting within the first year, and you must not have owned residential property in Australia before. The property can be new or established. Vacant land you intend to build on can also qualify under separate rules.

What the numbers look like at real Melbourne prices

The dollar impact of the threshold is bigger than most buyers realise, and the way the sliding concession works means duty rises steeply once you cross $600,000.

• $599,000: approximately $0 in duty.
• $620,000: approximately $4,300 in duty.
• $650,000: approximately $11,400 in duty.
• $700,000: approximately $24,700 in duty.
• $750,000: approximately $40,000 in duty (full rate applies).

In practical terms, a first home buyer who lands at $620,000 pays roughly $4,300 more in duty than one who lands at $599,000, even though the price is only $21,000 higher. Every step above the threshold costs more than the price step alone. That is the cliff in action.

Why this favours Melbourne buyers more than Sydney

Some states, like New South Wales, offer larger exemptions for new builds but treat established homes less generously. Victoria does the opposite: the first home buyer concession applies to the whole market, new and established alike, up to $750,000.

That has a real effect on suburb selection. Established homes and units in areas like Footscray, Springvale, Dandenong, Werribee, Frankston and Sunshine that come in under $600,000 give first home buyers full exemption without needing to buy off the plan or wait for a build. If the property is a house or a unit that meets the price cap and eligibility rules, the exemption is the same.

Using the threshold in negotiation

Once you understand the cliff, it changes how you approach listings just above $600,000. A property advertised at $625,000 is really a two-part conversation with the vendor. If you can negotiate to $599,000, you save the price difference of $26,000 plus roughly $6,000 in duty compared with buying at $625,000. The combined saving of about $32,000 is often bigger than either party expects, which is what makes the middle ground so obvious in the room.

This is not about lowballing. It is about knowing where a genuine, defensible offer sits. Listings at $610,000 to $650,000 are often negotiable to the exemption line if the property has been on the market for a few weeks or the vendor has already bought elsewhere. Your buyers agent, conveyancer or solicitor will typically flag the threshold as part of any Victorian first home buyer purchase, and it is worth raising it early with the selling agent so the vendor understands the reasoning behind your number.

Stacking the exemption with other support

If you buy a new build, Victoria still offers the First Home Owner Grant of $10,000 for eligible new homes valued up to $750,000. Stacked with a full stamp duty exemption on a new build under $600,000, that is around $10,000 in grant support plus the duty saved, before any federal help.

Eligible buyers can also layer the federal Home Guarantee Scheme to buy with a 5% deposit and no Lenders Mortgage Insurance, and salary sacrifice contributions into super through the First Home Super Saver Scheme in the lead-up. Each of these has its own eligibility rules, and it is worth checking exactly which combinations work for your circumstances before committing to a contract.

What this means for you

• If your budget is close to $600,000, keep the exemption line in your target range wherever possible. The duty saving is usually worth several months of extra saving.
• Between $600,000 and $750,000, model the exact concession before you sign. The sliding scale rises quickly and can quietly eat into your deposit buffer.
• Above $750,000, the concession is gone, so shop as any other buyer would and budget full duty on top of the purchase price.
• Talk to a licensed mortgage broker or your lender about how each scenario affects your borrowing capacity and cash to close. Your lender will assess eligibility and finalise the contract-ready numbers.

Run the numbers

Use these tools to see how the $600,000 threshold changes what a Victorian purchase actually costs you:

• Stamp Duty Calculator - plug in a Victorian purchase price and see the exact duty at, below and above the threshold.
• Grant Stacker - see how the stamp duty exemption combines with the Victorian First Home Owner Grant and federal schemes on a single purchase.
• Borrowing Power Calculator - check how much you can borrow, so you can see whether staying under $600,000 is realistic for the areas you are looking at.