First home buyers can benefit from stamp duty cut this weekend

A factor of the recently announced 20 per cent discount on stamp duty for first home buyers that could easily be overlooked is that it may apply to homes purchased now, even though it does not come into effect until 1 July, 2011.

REIV CEO Enzo Raimondo said this may not be appreciated by first home buyers 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 July or later, you will be eligible for the 20 per cent discount on stamp duty.

“Other assistance for first home buyers – the First Home Buyer Grant and Bonuses – apply from the date the contract is signed.

“Other key criteria for the stamp duty cut are that the total purchase price must not be over $600,000, it is your first home, and you must live in it as your 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 at www.sro.vic.gov.au.

“Overall, the cut is good news for those buying their first home and it will be worth around $5,794 on a home valued at $565,000,” Mr Raimondo concluded.