Stamp duty or land transfer duty is a one-off government fee you will be required to pay when you buy land or property in Victoria. In Victoria, stamp duty is imposed following the transfer of a title whether it be for residential, commercial, or investment purposes.
The duty is calculated on the property’s market value. Therefore, the more expensive the asset, the higher the land transfer duty rate you’ll have to pay.
The general land transfer duty rates relevant to owner-occupied property in Victoria are as follows:
$0 - $25,000 = 1.4% of the property's dutiable value
> $25,000 - $130,000 = $350 plus 2.4% of the dutiable value in excess of $25,000
> $130,000 - $960,000 = $2,870 plus 6% of the dutiable value in excess of $130,000
Over $960,000 = 5.5% of the dutiable value
For example, if you purchased a property valued at $700,000 (meaning you'd fall within the $130,000 - $960,000 threshold), you'd pay $27,802.50 in land transfer duty fees. This figure includes a $9,267.50 waiver that applies to purchases of residential property in Victoria with a dutiable value of up to $1 million, provided you sign your contract between 25 November 2020 and 1 July 2021.
If the dutiable value of your home was $1.5 million, you'd pay $82,500 in stamp duty, equivalent to 5.5% of the property's dutiable value.
From 1 July 2019, Victoria began imposing an additional duty rate of 8% on foreign purchasers who buy residential property.
In Victoria, the duty is payable to the State Revenue Office.
Land transfer duty is a tax, and therefore the money will go towards the Victorian state government budget. The money is put back into the economy and used to fund public sectors such as health, emergency services, roads and transport, and education and training.
You become liable to pay land transfer duty when the transaction or sale is finalised, and contracts are either exchanged or completed. If you do not pay the duty within 30 days of this, penalties and interest may start to accrue.
The Principal Place of Residence (PPR) concession is available to all homebuyers whose property does not exceed a value of $550,000, and who reside in that property for a continuous period of at least 12 months. The standard rates are as follows:
First home buyers in Victoria are offered stamp duty concessions. From July 1, 2017 those purchasing either a new home or an established property for up to $600,000 will pay zero stamp duty. First home buyers purchasing properties between $600,000 and $750,000 are also eligible for stamp duty concessions on a sliding scale.
Concession card holders and pensioners may be afforded a full exemption e for homes valued up to $330,000 and a concession for homes valued at less than $750,000. This incorporates the PPR concession, and the property must be intended to be your permanent place of residence for at least 12 months. If you are also a first home buyer, you must choose which concession you wish to receive, as you cannot receive both simultaneously. Depending on the value of your property, one may afford you a better discount than the other.
Read more about land transfer duty in Victoria here.