A townhouse can be a practical first home in Croydon, but the scheme you choose should be settled before you sign a contract. Croydon sits in the City of Maroondah in Melbourne's east, with a station on the Lilydale line. Whichever townhouse you consider, your pre-approval, your concessions and your deposit pathway all shape what you can afford.
How Much Stamp Duty Does a First Home Buyer Pay on a Victorian Townhouse?
In Victoria, a first home buyer pays no land transfer duty (stamp duty) on a home with a dutiable value up to $600,000. A concession applies above $600,000 up to $750,000, and standard rates apply above $750,000.
This first home buyer stamp duty concession covers established homes, new homes and vacant land. You must live in the property as your principal place of residence for at least 12 months, starting within 12 months of settlement. The benefit can be claimed once. If you are weighing up first home buyer options, start by comparing the townhouse's dutiable value with these thresholds.
The Victorian first home owner grant is $10,000, but it applies only to new homes that have never been sold or lived in, with a dutiable value up to $750,000. It does not apply to established townhouses.
Off-the-Plan Townhouses: The Duty Concession Available Until April 2027
Victoria has a temporary off-the-plan duty concession for dwellings in strata subdivisions with common property, which includes townhouses. It applies to contracts entered into on or before 20 April 2027.
The concession reduces your dutiable value by excluding construction costs incurred after the contract date. It has no value limit and no residence requirement. From 21 April 2027, the standard off-the-plan concession replaces it, and that version is available only to buyers who qualify for the principal place of residence concession or the first home buyer exemption or concession.
The trade-off is time. Off-the-plan purchases involve a wait before settlement, so your pre-approval needs to remain valid when the build completes. Ask your broker how long your approval lasts and what happens if your circumstances change.
5% Deposit Scheme: Buying a Townhouse Without LMI
The Australian Government 5% Deposit Scheme lets eligible first home buyers buy with a 5% deposit and without paying Lenders Mortgage Insurance (LMI). Housing Australia backs the lender for the portion of the loan between your deposit and 20% of the property value.
There are no income caps. Applications go through a participating lender, not directly to Housing Australia. In Victoria the price cap is $950,000 for capital city and regional centre locations and $650,000 for other areas. Both the purchase price and the lender's valuation must be at or below the cap, so check Croydon's postcode in Housing Australia's postcode search tool before you make an offer.
The main cost is a larger loan, which means more interest over time. You must also move in within six months of settlement and keep living there while the backing applies, or the lender may require LMI. The scheme protects the lender, not you. A gift deposit from family can contribute to your savings, though the lender sets its own rules on how gifted funds are treated.
Help to Buy: Shared Equity for Townhouse Buyers Under the Income Limits
Help to Buy is an Australian Government shared equity scheme where the government contributes 5% to 30% of an existing home's price, or up to 40% of a new home's price, in exchange for an equity share. Townhouses are eligible, and you make no monthly repayments, interest or rent payments on the government's share. The share is repaid when you sell, buy it back, or are required to repay it.
For the period from 1 July 2026 to 30 June 2027, the income threshold is $103,000 for an individual and $165,000 for joint applicants. As an example, consider a couple with combined taxable income of $160,000 on their latest Notices of Assessment. They sit under the joint threshold. They have savings equal to at least 2% of the purchase price and a lender-assessed borrowing capacity that falls short of the townhouse price. A participating lender assesses their financial capacity and then submits the application to Housing Australia. The government's contribution fills the shortfall, which keeps their loan smaller and avoids LMI.
The trade-off is that the government's share rises and falls with the property's value, and it is repaid when you sell or buy it back. Housing Australia also reviews your income at least every five years. If your income exceeds the threshold for two consecutive financial years, you may be asked to repay some or all of the share, but only once you can afford to. The panel of participating lenders is limited, and you cannot combine Help to Buy with the 5% Deposit Scheme.
Saving a Deposit with the First Home Super Saver Scheme
The First Home Super Saver scheme lets you release voluntary super contributions towards a first home deposit. You can have up to $15,000 of voluntary contributions counted in a single financial year and $50,000 in total.
You must request a determination from the ATO before the property transfers to you. In most cases the release takes 15 to 20 business days. Released amounts can carry tax consequences, so speak with your accountant before contributing. You must also enter a contract to buy or build within the required window, or additional tax applies. The money is locked in super until released, so it suits buyers who have time to plan. Eligibility is assessed individually, so a couple can each use their own contributions.
What Will a $600,000 Loan Cost Each Month?
At an illustrative rate of 6.75% p.a. over 30 years, a $600,000 principal-and-interest loan has a repayment of about $3,890 per month. This is an example only, and your actual rate will depend on your deposit size and lender.
Consider a couple who plan to borrow this amount. They test the repayment against their household budget before they bid. An offset account linked to the loan would let their savings reduce the interest charged, though some lenders charge a higher rate or a fee for loans with offset features. They use the mortgage repayment calculator to try different loan sizes and check their borrowing capacity before choosing a price range. With a repayment they can sustain and a pre-approval in hand, they can make offers with confidence.
If you want to compare home loan options for a Croydon townhouse, call one of our team or book an appointment at a time that works for you. We will map out the concessions, schemes and loan structure that suit your situation.
Frequently Asked Questions
Does a first home buyer pay stamp duty on a townhouse in Victoria?
No land transfer duty is payable on a dutiable value up to $600,000, and a concession applies from $600,000 up to $750,000. You must live in the home for at least 12 months, starting within 12 months of settlement.
Can I buy a townhouse with a 5% deposit and avoid LMI?
Yes, if you meet the Australian Government 5% Deposit Scheme criteria, including the Victorian price cap for the property's location. Applications are made through a participating lender, and you must move in within six months of settlement.
Is the Victorian first home owner grant available for established townhouses?
No. The $10,000 grant applies only to new homes that have never been sold or lived in, with a dutiable value up to $750,000.
Can I use Help to Buy and the 5% Deposit Scheme together?
No. Help to Buy participants cannot receive help from other schemes that provide loan support or backing. Help to Buy can still be used alongside first home owner grants, stamp duty concessions and the First Home Super Saver scheme.
