A guide to stamp duty for residential property in Victoria

26 October 2022

As one of Australia’s most popular states, Victoria has some of the highest stamp dues fees and rates in the country.  This can present a barrier to entry for some, and opportunities for others. It all relies on how much you know before you enter the home-buying phase.

In this article, we’ll take a look at stamp duty, how much it costs in Victoria, how you can possibly pay less, and when you need to pay it. We’ll also teach you why you need a conveyancer in your corner when approaching stamp duty matters.

What is stamp duty in Victoria?

Stamp duty in Victoria (also called land transfer duty) is the tax placed by the state government on property transactions. These are always included whether you buy a property, or a given it as, say, an inheritance.

The amount you pay in stamp duty depends on:

  • The value of your property - how much you paid for it or its value in the market

  • Your eligibility for discounts

How is stamp duty calculated?

Stamp duty is calculated by assessing the dutiable value of a property - how much you paid for it or its market value - whichever is worth more. In Victoria, stamp duty is then calculated on a sliding scale using the values below:

  • Property with a dutiable value of $0 to $25,000 - 1.4% of the value

  • Property with a dutiable value of $25,000 to $130,000 - $350 plus 2.4% of the dutiable value over $25,000

  • Property with a dutiable value of $130,000 to $960,000 - $2870 plus 6% of the dutiable value over $130,000

  • Property with a dutiable value of $960,000 to $2,000,000 - 5.5% of the dutiable value

  • Property with a dutiable value of over $2,000,000 - $110,000 plus 6.5% of the dutiable value in excess of $2,000,000

As the property gets more valuable, the more stamp duty you have to pay. However, there are some concessions and exemptions for certain property buyers.

What exemptions and concessions exist for stamp duty?

If you intend to use the property for a specific purpose, you might not have to pay as much in stamp duty. You may not even have to pay any at all. Usually, you can get a discount if a property is becoming your primary place of residence, or if you are buying for the first time.

First home buyer exemption

To help buyers get into the market for the first time, there exists an exemption for properties that fall under a certain dutiable value. 

  • Properties with a dutiable value of $600,000 or less can be fully exempt from stamp duty

  • Properties with a dutiable value between $600,000 and $750,000 can receive a concession on a sliding scale

It’s important to understand how much you are going to pay, and if you are entitled to a concession. You could potentially save yourself tens of thousands of dollars in stamp duty.

There are certain eligibility criteria to be met before you can obtain a first home buyer concession or exemption:

  • You can only receive the concession or exemption once

  • You must be over 18 at the settlement date

  • At least one applicant must be an Australian citizen or permanent resident

  • You must live in the concessioned home for at least 12 months

  • You must not have owned a residential property prior to 1 July 2000

  • You must not have lived for 6 months or more in a home that you’ve owned on or after July 1 2000

Principal place of residence concession

You can also be entitled to a concession if you intend to live in your new property as a home for at least 12 months. The value of the property must be between $130,000 and $550,000.

Off the plan duty concession

There are also concessions for people buying property off the plan, before construction is completed. This works by having you pay a percentage of the stamp duty you would have had construction been completed.

Pensioner duty concession

There is also stamp duty relief for pensioners in the form of both exemptions and concessions for homes valued up to $750,000. There are several eligibility requirements to be aware of when considering the above concessions and exemptions. Be sure to contact your conveyancer to see if you meet the criteria.

When do I pay stamp duty?

You typically pay stamp duty at settlement. You can also pay up to 30 days after settlement. You will only receive the title to a property after you’ve paid stamp duty.

Navigating stamp duty in Victoria can seem complex. However, Complete Conveyancing Solutions is in your corner to help you find success in the home-buying process. If you have any questions about how much you are likely to pay, get in touch with our team of experts.