Stamp duty in Victoria is calculated on the purchase price or the property’s value on the open market (whichever is greater). It is calculated on a sliding scale & starts at 1.4% if the property is valued at $25,000 & rises to 5.5% if the property is valued at or above $960,000.
Please see table below:
Dutiable value range Rate
$0 – $25,000 1.4% of the dutiable value of the property
> $25,000 – $130,000 $350 plus 2.4% of the dutiable value in excess of $25,000
> $130,000 – $960,000 $2870 plus 6% of the dutiable value in excess of $130,000
>$960,000 – $2,000,000 5.5% of the dutiable value
More than $2,000,000 $110,000 plus 6.5% of the dutiable value in excess of $2,000,000
With some of the highest stamp duty rates in the country, Victorians face a big upfront barrier to the property market. However, there are concessions available for eligible homebuyers, so it pays to know what’s around.
What you intend to do with your property can determine how much stamp duty you pay, or whether you pay any at all.
Discounts may apply for those planning to move into their property as their principal place of residence, or first time buyers.
You may be eligible for a concession or exemption if you’re:
• A first-home buyer
• Buying a home to live in
• A pensioner
• Purchasing off-the-plan
First-home buyers can reduce the amount of stamp duty they pay, or avoid it altogether, if their property value falls under a certain threshold.
Properties with a dutiable value of $600,000 or less can receive the first home buyer duty exemption
Properties with a dutiable value of $600,001 to $750,000 can receive the first home buyer duty concession. The concession amount is based on a sliding scale.
First home buyers purchasing a property valued at more than $750,000 receive no stamp duty relief under this scheme.
It’s worth noting that this is a separate scheme from the First Home Owner Grant (FHOG), which is a lump-sum payment, whereas the first home buyer duty exemption and concession reduces the amount of stamp duty you pay.
We would suggest that all clients check their own situation with the State Revenue Office to get the most up to date advice as things do change form time to time.
To qualify for any of these discounts:
• You cannot have already received an exemption or concession under this scheme – it’s only available once.
• You must be over 18 years old at settlement or completion of construction, although you can apply to have this waived.
• At least one of the applicants must be an Australian citizen or permanent resident
• You must live in the home as your principal place of residence for at least 12 months, commencing within the first year of settlement or completion of construction.
• You’ve never owned a residential property in Australia prior to 1 July 2000.
• You’ve never lived in a home that you owned in Australia on or after 1 July 2000, for a continuous period of at least six months. If you purchased a property after this date and have not lived there as your home, for example an investment property, you may be eligible for the concession when you buy your first home to live in.
• Unlike the requirements of the FHOG, it doesn’t matter whether you buy a new or established home.
Find more information on the first home buyer duty concession or reduction visit the state revenue office website.
It’s not just first-home buyers who can access a stamp duty discount.
You may also be entitled to a concession if you buy a property that you intend to live in as your home, known as your “Principal Place Of Residence” or PPR.
To qualify for the PPR concession:
• The dutiable value of your property is valued between $130,000 and $550,000.
• You intend to use that property as your principal place of residence for a continuous period of 12 months, within 12 months of settlement.
• If you buy the property with others, at least one of you must satisfy these requirements.
Properties valued at less than $130,000 will be calculated at the general rate.
The concession does not apply to land without a dwelling designed and constructed for residential purposes.
If you’re buying a property off-the-plan, such as a house and land package or a unit, you may be eligible for an off-the-plan concession.
It works by reducing the dutiable value of your home, so you only pay a percentage of the stamp duty you otherwise would have.
Rather than using the contract price or the market value of the property as is normally done, the dutiable value is calculated as the contract price, minus any construction costs that are incurred on or after the contract date. This reduces the amount of duty you pay.
The date of the contract is important as it affects the scope of the off-the-plan concession. For example, if you sign a contract before any construction has started, you’ll be able to subtract more of the construction costs than if you buy at a later construction stage. This means that the earlier you buy, the more you’ll save.
Generally, the dutiable value of your home after applying the concession cannot be more than $550,000, or $750,000 for first home buyers, however the Victorian Government has temporarily increased these thresholds for all home buyers to $1 million for contracts entered into between 1 July 2021 and 1 July 2023.
Example:
You purchase an apartment off-the-plan for $620,000. You plan to live in the property as your home and sign the contract before any construction has started.
The developer advises you $465,000 of the contract price will be spent on constructing your apartment.
This means that the dutiable value after applying the off-the-plan concession is $155,000 ($620,000 – $465,000).
To be eligible for the off-the-plan concession:
• You must be eligible for the principal place of residence concession or the first home buyer exemption or concession
• You must live in the property for 12 months within 12 months of possessing the property (usually at settlement).
• All purchasers must be over 18 years old, except where a purchaser is the guardian of a person with a legal disability.
• The concession is not available to a company or a trustee of a trust buying a property off-the-plan.
The government provides stamp duty relief for eligible pensioners.
You may be entitled to a one-off exemption from duty if you buy a home valued at $330,000 or less, or a one-off concession from duty when you buy a home valued from $330,001 to $750,000.
Eligible pensioners can also receive a duty exemption or concession when buying a share of a home (also known as a fractional interest) rather than the whole property. The pensioner exemption or concession will be assessed on the value of your share.
Eligibility for the pensioner duty exemption and concession
To be eligible for the pensioner duty exemption or concession, you must:
• Hold of one of the approved concession cards on the settlement date.
• Buy the property for market value.
• Intend to live in the home as your principal place of residence.
As mentioned earlier, we always advise our clients to check with the State Revenue Office website for the most up to date information on Stamp Duty & also check with their conveyancer, solicitor, accountant or mortgage broker to be sure that the information they have been given is accurate to their unique situation. Never take the advice solely of a real estate agent, family, friend or ourselves.
