Victorian first-home buyers are being caught rorting state government support schemes in growing numbers, with clawbacks accelerating sharply over the past decade.
Data from the State Revenue Office of Victoria reveals more than 5,244 buyers illegally claimed stamp duty concessions over the past ten years, with the government recovering $48.67m in unpaid tax, fines and interest. A further 1,966 buyers wrongly claimed the $10,000 First Home Owner Grant over the same period, triggering $24.74m in repayments. Combined, offenders have repaid more than $73m to the state over the decade, Herald Sun reported.
The trend is worsening. In the 2025 financial year alone, 805 stamp duty breach cases were assessed, with $12.16m recovered — up from just 239 cases and $1.59m in 2016, before the first-home buyer stamp duty concession was expanded. Grant repayments in 2025 reached $2.99m across 235 assessed cases.
For mortgage brokers, a client caught in a breach can trigger loan serviceability issues, forced sales, and reputational risk on files the broker helped originate.
Common breaches include failing to live in the property as a principal place of residence, not completing the required 12-month continuous occupancy, renting the home out while claiming owner-occupier benefits, and failing to disclose a partner's prior interest in property or a previous grant. Some buyers concealed a partner's prior ownership by omitting former names such as a previous married name.
PropTrack economist Anne Flaherty (pictured) said the figures were "incredibly high" even though breaches represent less than 1% of total scheme users. Flaherty pointed to financial pressure as a likely driver.
"I don't know if that's a symptom of a lack of clarity around what the rules are, or people being more financially pressed and looking for ways to get ahead," she said. "It could come down to people being more financially desperate."
On the ground, the desperation Flaherty describes is visible. Prominent Melbourne buyers' agent Cate Bakos said the official figures likely underrepresent the true scale.
"I know from my experience that some want to get creative and talk about how they can rort the system," Bakos said. "I would be warning someone at least monthly who is looking to get a rort."
And the stakes, she said, are serious. For buyers caught in a breach, the financial consequences could be severe — potentially forcing a sale. Repaying the tax liability or grant alongside existing mortgage obligations could affect loan serviceability, creating direct implications for brokers managing those files.
For brokers, the red flags are specific: a client intending to rent out the property immediately after settlement, or a partner with prior ownership history they haven't disclosed, should be addressed before the application proceeds.
Bakos also called for a review of the $750,000 stamp duty concession cap, arguing it was no longer fit for purpose. The numbers back her up — Cotality data puts Melbourne's median house price at approximately $1.03 million, well above both thresholds, which have been unchanged since July 2017. A growing share of Melbourne first-home buyers now receive no stamp duty relief at all — adding to the affordability squeeze driving some to take the risk.
That squeeze has a sharp edge right now. CBA modelling suggests a Melbourne first-home buyer who purchased at the $950,000 Home Guarantee Scheme limit with a 5% deposit in January 2026 could be in negative equity by December. For brokers, a grant breach repayment demand on top of negative equity is a scenario worth stress-testing now.
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