What is stamp duty? Here is a guide to understanding stamp duty in Victoria when purchasing a direct residential property. Before purchasing a property, it’s wise to assess the stamp duty implications to ensure you can afford the total cost of buying a home.
What is stamp duty?
In Victoria is also known by the term ‘land transfer duty’. It is essentially incurred when a buyer purchases a property. It is also a one-off government tax payment paid by the purchaser.
The cost is assessed on the purchase price and calculated on a scaling tier structure, however the rate of stamp duty is not the same for all buyer types, as some buyers such as first home buyers pay none to a certain dutiable value. Foreign purchasers also differ from the standard rates.
Below is a summary of the rate of stamp duty applied based on a property’s dutiable value.
Stamp duty for first home buyers
There are stamp duty exemptions for first home buyers in Victoria on the basis the property’s dutiable value is up to $600,000. This equates to an approximate saving of up to $31,070.
In the event a first home buyer purchases a home valued between $600,001 and $750,000 a concessional rate applies. Please refer to the State Revenue Office website for details.
Stamp duty for foreign purchasers
Foreign purchasers pay the full stamp duty as per the above tabular illustration, however they are also required to pay an additional duty of up to 7%. Please refer to the provisions outlined on the State Revenue Office website for details.
Other Stamp Duty exemptions and concession
Victoria also provides a concession to all purchasers of properties valued between $130,000 and $550,000 from paying stamp duty where they intend to use that property as their principal place of residence.
There is also a concession for purchases used as their ‘principal place of residence’ when buying off the plan. When you buy off-the-plan, you may be eligible for a concession that can apply to contracts associated to:
- House and land packages
- Apartments (both high-rise and low-rise residential buildings)
- Refurbished lots.
There is also concessions and/or exemption to pensioners buying a home valued at under $330,000 and a concessional rate to pensioners buying a home valued between $330,001 and $750,000. Please refer to the provisions outlined on the State Revenue Office website for details.
How do you receive an exemption or concession?
In order to receive these exemptions or concessions, you are required to complete an application directly with the State Revenue Office. If you work closely with a mortgage broker, they will help organise the application simultaneously with the loan application. Both the mortgage broker and bank/lender can make this a seamless process to apply.
Before buying a property, we recommend seeking professional property advice. At Crest Property Investments we specialise in sourcing brand new and off the plan properties for buyers. We also do not charge fees to buyers! If you’d like to learn more, please feel free to contact us. We welcome the opportunity to help you make the best property decision.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.
September 2021
