What is stamp duty? A guide to stamp duty in Victoria
What is Stamp Duty?
Stamp duty, or land transfer duty as it’s known in Victoria, is a once-off government tax on buying property payed by the purchaser. It is based on the purchase price and calculated via a scale, in a similar manner to income tax.
However, these standard rates don’t apply to all property purchases, particularly first home owners and foreign buyers.
Pictured below is a full tabulation of how transfer duty is calculated in Victoria.
Stamp duty on foreign purchasers
However, these rates don’t apply to all buyers or all types of property purchases. Foreign purchasers often have to pay additional duty of up to seven percent.
You can read more about the stamp duty provisions affecting foreign purchasers on the State Revenue Office website.
Stamp Duty exemptions for first home buyers
The Victorian government’s current policy as of 2017 is the complete exemption of stamp duty for first home owners purchasing a property valued at up to $600,000. A saving of up to $31,070.for first home buyers.
For first home buyers purchasing a home valued between $600,001 and $750,000 a concessional rate of stamp duty applies.
Unlike the NSW First Home Owner Grants (FHOG), the stamp duty concession and exemption apply to all property types.
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.
The rate of concession equates to a one percent reduction for all properties valued between $130,000 and $440,000 and a flat reduction of $3,100 for properties valued between $440,001 and $500,000.
There is also a “principal place of residence (off the plan concession)”, which only people purchasing an off the plan property they intend to use as their home are eligible and a threshold applies to the dutiable value of the property. This is $550,000 for non-first home buyers and $600,000 (for an exemption) $750,000 (for a concession) for first home buyers.
The Victorian government also provides a stamp duty 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.
Below are some properties eligible for stamp duty exemptions in Victoria:
1. Melbourne Quarter, Docklands
Address: 628 Flinders Street, Docklands VIC 3008
One-bedroom apartment from $458,000
2. Live City, Footscray
Address: 124-188 Ballarat Road, Footscray VIC 3011
Two-bedroom apartments from $460,000
3. Melbourne Grand, Melbourne
Address: 556-558 Lonsdale Street, Melbourne VIC 3000
One-bedroom apartments from $489,000
Click here to view six homes in Melbourne you can purchase without paying stamp duty.