The Victorian government is making some significant changes to the the First Home Owners' Grant, which are currently being phased in, but will take full effect from 1 July, 2013.

After July 1, 2013, only purchasers of brand new homes, whose purchase price is less than $750,000 will be eligible for the First Home Owners' Grant. These purchasers will receive a $10,000 grant and a 40% stamp duty reduction. Purchasers of existing homes may still be eligible for the Principal Place of Residence concession (see below).

For contracts signed prior to July 1, the existing stamp duty rules will still apply - purchasers of their first home with purchase price of less than $750,000 (existing dwelling, or brand new) will receive a $7,500 grant and a 30% stamp duty reduction, or 40% if the settlement date is after July 1.

Principal Place of Residence (PPR)

The PPR stamp duty reduction will be unaffected by the above changes. The PPR concession is a 1% stamp duty reduction for properties with a purchase price of less than $550,000, provided that:

• the purchaser will use the property as his/her principal place of residence within 12 months of settlement; and
• the purchaser resides at the property for a continuous period of at least 12 months.