Stamp duty in Victoria

Kirsten Craze, Property Journalist

First published 07 October 2024, 12:00 PM

Your go-to guide for everything there is to know about stamp duty in Victoria.

What is stamp duty about?

When it comes to buying real estate, Victoria has one of the highest rates of stamp duty in Australia. Given that it is a hefty upfront cost for property purchasers, it makes great financial sense to understand just what stamp duty is, how much you will need to pay, and when you will need to pay it, so you can accurately plan your buying budget. It could also make a significant difference to your property journey if you qualify for a stamp duty exemption or concession. Officially known as land transfer duty, stamp duty is essentially paying the government a fee for transferring a property’s title into your name. Stamp duty got its more popular name from the rubber stamp officials once used to sign off on property paperwork and today it earns Victoria around $9 billion annually. Just like other state government taxes, stamp duty is a major income stream for Victoria with the revenue going towards funding essential public services.

This one-off payment needs to be paid within 30 days of settlement, so it’s crucial to factor it into your budget.

How is stamp duty calculated in VIC?

Stamp duty is calculated as a percentage of the property’s purchase price and rates are tiered. Therefore, the more expensive the real estate you buy, the higher rate of duty you will need to pay.

Here’s a simplified breakdown of how the duty in Victoria is calculated:

$0 to $25,000	1.4% of the property value
$25,000 to $130,000	$350 plus 2.4% of the value in excess of $25,000
$130,000 to $960,000	$2,870 plus 6% of the value above $130,000
$960,000 to $2 million	5.5% of the property value
More than $2 million	$110,000 plus 6.5% of the value in excess of $2 million

Example case study

Charlotte and Steph have just bought an existing home for $650,000 and are consulting a stamp duty calculator to determine how much they will need to pay. Because Steph has previously owned an investment property, they don’t qualify for an exemption or concession and are liable for the full amount. The duty on the transaction in Victoria is $34,070 and there is an additional transfer fee of $1,631 bringing the total to $35,833.

Stamp duty exemptions and concessions in VIC

Temporary off-the-plan duty concession

While stamp duty on off-the-plan purchases was calculated based on the total price of the property, including the construction value, stamp duty will now be calculated solely on the land value before construction begins, thanks to the new temporary off-the-plan duty concession which will be available until 21 October 2025.

Any purchaser of off-the-plan apartments, units, or townhouses within a strata subdivision is eligble.

PPR properties valued between $130,000 and $440,000

In this case, stamp duty is calculated at a rate of $2,870 plus 5% of the value in excess of $130,000. PPR properties valued between $440,000 and $550,000 will have stamp duty calculated at a rate of $18,370 plus 6% of the value more than $440,000.

Eligible pensioners

Eligible pensioners can receive a one-time duty concession on new and established properties valued up to $750,000.

Family Farm Exemption

The family farm exemption applies when a farm is transferred between relatives and may mean the property is exempt from stamp duty. Additionally, young farmers aged under 35 years of age at the time of purchasing agricultural land could also qualify for full or partial exemptions on properties valued up to $750,000.

Foreign nationals

In Victoria, foreign nationals purchasing property must pay a further 8% on top of the standard stamp duty fee.

First-home buyer help with stamp duty

When you buy your first home in Victoria - new or established - and the purchase price is less than $600,000, you may be eligible for a total stamp duty exemption. To qualify, you must live in the property for a continuous period of 12 months, commencing within the first year of settlement. Alternatively, if your home purchase is more than $600,000, but less than $750,000, you may be eligible for a 50% duty reduction. Vacant land can also qualify for the exemption or concession if you're buying it to build your first home.

Budgeting for stamp duty

Unless you qualify for an exemption, stamp duty is an unavoidable cost that comes with buying a home. And at no small sum, it’s crucial to budget for it early on in your property search so you’re not caught out when you can least afford it.

Use an online calculator specific to Victoria so you have an accurate estimate of how much you will need to pay. Once you know the amount, factor it into your upfront costs, this way you won’t be borrowing to pay the bills.

Always speak to a professional such as a conveyancer, solicitor or mortgage broker to provide you with detailed advice tailored to your situation.