Struggling to figure out how much stamp duty you’ll have to pay when buying property in Victoria, Australia?
You’re not alone.
This is a common concern for many property buyers, and we’re here to help.
In this comprehensive guide, we’ll break down everything you need to know about Victoria’s stamp duty, including:
- What is stamp duty and how much does it cost?
- When do you need to pay stamp duty?
- Are there any exemptions or concessions available?
- How is stamp duty calculated?
- What property types are subject to stamp duty?
- How does stamp duty impact foreign buyers?
Let’s dive in and make sure you understand stamp duty’s role in your property purchase budget and identify any potential savings opportunities.
What Is Stamp Duty And How Much Does It Cost In Victoria?
Stamp duty is a tax levied by the Victorian government on the purchase of property.
The exact amount you pay is determined by the property’s value and whether it’s considered your principal place of residence (PPOR) or not.
Victoria has two sets of stamp duty rates:
- Concessional Rates: Applicable to principal places of residence.
- General Rates: Applicable to non-principal places of residence (investment properties, holiday homes, etc.)
The table below provides a snapshot of the current stamp duty rates in Victoria (as of April 2023).
Remember, these rates are subject to change, so it’s always best to refer to the official Victorian State Revenue Office (SRO) website for the most up-to-date information:
| Dutiable Value Range (PPOR) | Rate (PPOR) | Dutiable Value Range (General) | Rate (General) |
|---|---|---|---|
| Up to $25,000 | 1.4% | Up to $25,000 | 1.4% |
| $25,000 – $130,000 | $350 + 2.4% of the excess over $25,000 | $25,000 – $130,000 | $350 + 2.4% of the excess over $25,000 |
| $130,000 – $440,000 | $2,870 + 5% of the excess over $130,000 | $130,000 – $960,000 | $2,870 + 6% of the excess over $130,000 |
| $440,000 – $550,000 | $18,370 + 6% of the excess over $440,000 | N/A | N/A |
| Over $550,000 | General Rates Apply | $960,000 – $2,000,000 | 5.5% of dutiable value |
| Over $2,000,000 | $110,000 + 6.5% of the excess over $2,000,000 | More than $2,000,000 | $110,000 + 6.5% of the excess over $2,000,000 |
As you can see, the concessional rates for principal places of residence offer significant savings compared to the general rates.
When Do You Have To Pay Stamp Duty In Victoria?
Stamp duty is typically payable on settlement day, which is the day the legal ownership of the property is transferred to you. You cannot defer this payment like you can with a mortgage.
Therefore, it’s crucial to factor stamp duty into your budget alongside other settlement costs like deposit, registration fees, and building inspections.
Are There Any Stamp Duty Exemptions Or Concessions Available In Victoria?
The good news is that Victoria offers several stamp duty exemptions and concessions that can help reduce your overall purchase cost.
Here’s an overview of some of the most common exemptions and concessions:
- First Home Buyer Exemptions/Concessions: Victoria offers a full stamp duty exemption for eligible first home buyers purchasing a property valued at $600,000 or less. Additionally, a concession applies to properties valued between $600,000 and $750,000.
- Pensioner Concessions: Eligible pensioners who purchase a property for their primary residence may qualify for a stamp duty exemption.
- Other Potential Exemptions and Concessions: Victoria may offer additional exemptions or concessions in specific situations. These can include:
- Transferring land from a deceased estate.
- Transferring a family farm between family members (conditions apply).
- Transferring land between partners or spouses.
- Young farmers purchasing their first farm.
- Corporate groups restructuring their businesses.
- Transfers of land for charitable purposes.
- Purchasing commercial, industrial, or extractive industry property in regional Victoria.
- Holding a valid Commonwealth concession card (conditions apply).
How Is Stamp Duty Calculated In Victoria?
The amount of stamp duty you pay is calculated based on the property’s dutiable value. This value is typically the higher of the purchase price or the property’s market value.
Victoria uses a sliding scale system to determine your stamp duty liability. You’ll pay a set percentage of the dutiable value based on the property’s value range.
For example, if you’re buying a principal place of residence valued at $350,000, you would fall under the $25,000 – $130,000 dutiable value range.
In this case, the calculation would be:
- $350 (base fee) + (2.4% x ($350,000 – $25,000)) = $3,400
What Property Types Are Subject To Stamp Duty In Victoria?
In Victoria, stamp duty applies to various property purchases. Here are some common examples:
- Residential properties (including first homes above a certain value)
- Investment Properties
- Holiday homes and secondary residences
- Commercial properties
- Primary production land
How Does Stamp Duty Impact Foreign Buyers in Victoria?
Foreign buyers (individuals, companies, or trusts) purchasing residential property in Victoria must pay the standard stamp duty rate, plus an additional 8% foreign purchaser additional duty (as of May 2024).
Are You Ready To Secure Your Dream Property?
Credit Hub can help you handle the entire property purchase process, from securing finance to ensuring a smooth settlement. Our team of experienced mortgage brokers can find you competitive loan rates, and our conveyancing specialists can handle the legal aspects of your purchase, including stamp duty calculations and liaising with the Victorian State Revenue Office.
Disclaimer:
The information presented by staff or employees of Credit Hub and its associated companies is provided for general informational purposes only. We do not guarantee the accuracy, completeness, or timeliness of the data or views presented. Audience members should conduct their own research and verify any information before relying on it. Credit Hub and its associated companies are not liable for any errors or omissions, or for any actions taken based on the information presented.