Stamp Duty in Victoria: How It Is Calculated and What You Will Actually Pay

What stamp duty is

Land transfer duty is a one-off tax on the transfer of property, administered by the State Revenue Office under the Duties Act 2000. You pay it when you buy, and it is generally due at settlement. The amount depends mainly on the dutiable value of the property, which is usually the purchase price or the market value, whichever is higher.

How it is calculated

Victoria uses a sliding scale. The higher the value of the property, the higher the rate of duty, and the rate applies in brackets rather than as a single flat percentage. As a rough guide, on a standard purchase without any concession, duty on a mid-priced Melbourne home runs into the tens of thousands of dollars.

Because the brackets and rates can change, the most reliable way to get an exact figure is the State Revenue Office duty calculator, or ask your conveyancer to calculate it as part of your purchase.

What affects how much you pay

Several things change the final number beyond just the price of the property:

• Whether the property will be your home or an investment
• Whether you are a first home buyer
• Whether you are buying off the plan
• Whether you are a foreign purchaser, which attracts additional duty
• Whether the property is residential or commercial

Concessions and exemptions that reduce the bill

Victoria offers a number of concessions that can significantly reduce or remove duty for eligible buyers. The main ones are the first home buyer exemption and concession, the principal place of residence concession, the off-the-plan concession, and the pensioner concession. Each has its own eligibility rules and value thresholds.

It is worth checking every concession you might qualify for, because the savings can be large. A first home buyer under the relevant threshold can pay no duty at all.

Budget for it early

Stamp duty is payable at settlement and is generally not something you can add to your loan after the fact, so it needs to be part of your budget from the start. When you are working out what you can afford, factor in duty alongside your deposit, legal costs and other purchase expenses.

As part of your conveyancing, Orange Legal Group calculates your duty, checks the concessions you may be entitled to, and makes sure the correct amount is paid at settlement.

A note on changing rates

Duty rates, brackets and concessions are set by the State Government and change from time to time, sometimes at budget announcements. Always confirm current figures with the State Revenue Office before relying on an estimate, and treat online calculators as a guide rather than a final number.