Whether you’re buying your first or fourth property in Victoria, stamp duty is an inevitable cost that will incur as part of the purchasing process.
There are some concessions and incentives that make some property owners eligible for stamp duty concessions. However, it’s important to be aware of stamp duty costs in Victoria, as it’s quite a big lump sum of money that needs to be considered, on top of your house deposit.
If you’re not careful in calculating the cost of your stamp duty beforehand, you might be in for a shock when faced with it during the property purchase process. The cost of stamp duty can easily fall in the range of $3000 to upwards of $10,000, which is why it’s crucial to plan ahead with it in mind.
What is stamp duty?
It’s essentially the tax that the Victorian government charges for the transfer of ownership of property. Stamp duty will regularly change based on state government (often yearly), and Victorian government also offers incentives and concessions for stamp duty on property.
How much does stamp duty cost in Victoria in 2024?
| Dutiable property value | Stamp duty rate |
|---|---|
| $25,000 and below | 1.4% of the dutiable value of the property |
| From $25,001 to $130,000 | $350 plus 2.4% of the dutiable value in excess of $25,000 |
| From $130,001 – $960,000 | $2870 plus 6% of the dutiable value in excess of $130,000 |
| From $960,001 – $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 |
These latest rates apply to property transactions made on 1 July 2021 and onwards.
How is stamp duty calculated in VIC?
It’s a fair question — after all, you’ll want to make sure that you’re not paying more than you should, especially for such large sums of money.
Stamp duty is applied on a variable scale with the lowest payable duty starting at 1.4% of the property value. Depending on how much your purchased property is worth, this percentage gradually increases up to a maximum of 6.5%.
Dutiable property value refers to the price that property would usually fetch on the open market. Buying a house at a preferential discount from a friend or family member won’t change its dutiable property value — the stamp duty rate won’t be applied to the purchase price, and you’ll have to pay it as if there was no discount.
Let’s look at a sample calculation based on the median house price in VIC
Taking a house price of $961,000, we can see that the applicable rate is 5.5% of the property value, giving us a stamp duty amount of $961,000 x 0.055 = $52,855.
Example stamp duty amounts for varying dutiable property values
| Dutiable property value | Stamp duty payable |
|---|---|
| $20,000 | $280 |
| $65,000 | $1,310 |
| $100,000 | $2,150 |
| $250,000 | $8,870 |
| $500,000 | $21, 970 |
| $800,000 | $43,070 |
| $1,000,000 | $55,000 |
| $1,500,000 | $82,500 |
| $2,100,000 | $116,500 |
Click here to see the stamp duty calculator VIC (2024)
Applying for stamp duty concessions
As the city with the second-highest property prices in Australia, Melbourne has no shortage of property buyers looking for ways to reduce the cost of stamp duty.
Historically, there have been multiple concessions for stamp duty in VIC. However, most of these concessions such as the 50% land transfer stamp duty waiver for residential property in Melbourne City have already come and gone.
As a property buyer in VIC in 2024, there is the option of applying for the first home buyer duty reduction. You may be eligible for this stamp duty cost reduction if:
- you purchased your first home in VIC on or after 1 July 2017.
- the home’s dutiable property value is –
- $600,000 or less (full stamp duty exemption applies)
- Between $600,001 to $750,000 (stamp duty concession applies)
- you or your spouse/partner have not received the First Home Owner Grant in Australia, and have not owned any property (whether jointly or separately)
As mentioned in the eligibility criteria, first home owners can receive up to a full exemption from stamp duty payments if they meet the requirements.
Additional concessions may apply if you:
- buy an off-the-plan land and building package or a refurbished lot
- are a pensioner or concession cardholder
- intend to live in your home for a year within 12 months of your settlement
- are a farmer under the age of 35 buying your first parcel of farmland
You can view the full eligibility requirements for each of the above concessions on the State Revenue Office of Victoria’s page for first home owner concessions.
Stamp duty and foreign purchasers
If you purchase or acquire property in Australia as a foreign purchaser, you may be liable for additional stamp duty. This condition includes individual foreigners, foreign corporations, and foreign trusts, and applies to the following:
- buying a residential property at auction or by private sale
- buying a non-residential property with the intention of converting it to residential property
- being given a residential property as a gift
- certain leasing arrangements with respect to residential property
You may be exempted from this additional stamp duty as a foreign purchaser if you are purchasing property with your spouse or partner who is an Australian citizen, Australian permanent resident or New Zealand citizen who holds a special category visa.
When do I pay stamp duty in Victoria?
In Victoria, stamp duty is payable within 30 days of the property transaction settlement. However, if you are completing the transaction electronically, you may be required to pay our stamp duty in full on the day of the settlement.
Purchasing or buying? Speak to the experts at Entry Conveyancing
At Entry Conveyancing, we can help you with all the legal aspects of the property transfer with our team of conveyancers in VIC. Reach out to us today for conveyancing support in Melbourne CBD, Northcote, Melton, and all across Victoria.
