Stamp Duty Victoria

If you’re in the process of saving up for a home in Victoria, you probably know that you need to budget for a deposit, plus additional costs like stamp duty. But if you thought Land Transfer Duty (previously “Stamp Duty”) had something to do with posting a letter, you’ve come to the right place. In this article, we’ll explain what Land Transfer Duty ty is and how it works in Victoria.

What is Stamp Duty?

In Victoria, Land Transfer Duty is also referred to as land transfer duty and is a government tax that applies to certain transactions such as the purchase of a home. It’s calculated based on the “dutiable value” of a property, or the purchase price or the property’s value, whichever is greater.

Other than the cost of your actual property, Land Transfer Duty could be the largest cost you pay when purchasing a home in Victoria. And unlike the cost of a home, which can be loaned to you by a bank and then paid back over time, Land Transfer Duty is typically paid in-full, upfront (like a deposit). You’ll usually be asked to pay Land Transfer Duty within 30 days of settlement. So if you’re saving up for a deposit, it can be helpful to have an idea of how much Land Transfer Duty you’ll have to pay.

How is Land Transfer Duty calculated?

Similar to income tax, stamp duty is calculated on a sliding scale, rather than a set percentage or flat fee.

Our Stamp Duty calculator can help you estimate the land transfer duty, you would owe on a property in Victoria based on:

• The date of the contract for your property purchase or if there is no contract, the date it was purchased.
• The dutiable value of the property.

Our calculator will also factor in any potential concessions or extra duties that might apply, such as:

• Regional commercial, industrial, and extractive industries property concession: If your property is purchased in regional Victoria, or to be used for specific purposes, you could qualify for a 20% concession.
• Foreign purchaser additional duty: In Victoria, you may have to pay an additional duty as a foreign purchaser. If you’re a citizen or permanent resident of Australia or New Zealand, you won’t be considered a foreigner.
• Principal place of residence concession: Also known as a PPR concession, you may be eligible for a reduced stamp duty if you intend to live at the property for at least 12 months after the settlement. This concession is potentially available to all homeowners whose property is valued at up to $550,000.
• First home buyer exemption, concession or reduction: You may be eligible for a Land Transfer Duty reduction, or full exemption from paying one, when purchasing your first home. There are a few eligibility requirements you can familiarise yourself with to see if you could qualify. These eligibility requirements are the same as the First Home Owner Grant, except that the home does not have to be newly built, and the value of the property can exceed $750,000.

How do I use the Calculator?

For more accurate results, you’ll need two key pieces of information:

• The contract date or transfer date, whichever is applicable to your situation.
• The dutiable value of your property.

This information will give the base rate, and from there the calculator will ask you the following questions to see if you could qualify for exemptions or concessions, or whether you will be asked to pay additional duty:

• Are you purchasing property in regional Victoria for commercial, industrial or extractive industries use?
• Are you a foreign purchaser?
• Is it your principal place of residence (PPR)?
• Is it your first home?

With this information, our calculator will estimate the amount you could pay in stamp duty fees.

Do I have to pay Land Transfer Duty if I acquire a property?

In Victoria, you’ll typically still need to pay Land Transfer Duty if you’ve acquired a property via a lease or as a result of a trust or gift, or any other circumstances where a property changes from one owner to another. However, you may qualify for a concession or exemption as the beneficiary of a deceased person, or if the property is being transferred to you by your spouse or partner.

What other fees are associated with buying a home?

In addition to costs such as your deposit, legal fees and loan fees, there are a few other fees that can sometimes be lumped in with what you’ll pay under Land Transfer Duty. This can include:

• Mortgage registration fee: This covers the charge for registering for a home loan.
• Transfer fee: The transfer fee is the cost to transfer the property to your ownership.

Compare home loan products for your Victorian home with Lendi

If you’re buying a home, you may also be on the lookout for a home loan provider. We’ve partnered with Lendi to compare a range of home loans from 35+ lenders. Compare online give Lendi a call on 1300 186 260 (08:30-18:30).

Sources:
1. https://www.sro.vic.gov.au/regional-commercial-industrial-and-extractive-industries-property-concession
2. https://www.sro.vic.gov.au/foreignpurchaser
3. https://www.sro.vic.gov.au/pprdutyconcession
4. https://www.sro.vic.gov.au/fhbduty
5. https://www.sro.vic.gov.au/first-home-owner
6. https://www.sro.vic.gov.au/deceased-estates-and-duty
7. https://www.sro.vic.gov.au/spouse-and-partner-exemption

Last updated: 1/04/2021