Stamp duty is a mandatory fee you pay when you purchase a house. However, the rates differ among states and territories, with some being costlier than others.
So, how much is stamp duty in Victoria, when do you need to pay the charge and are there any ways you can avoid it?
We have all the answers below.
What Is Stamp Duty in Victoria?
Stamp duty on a house in Victoria is a compulsory tax that the state government charges for transferring property from one owner to another. But how is stamp duty calculated in Victoria? The amount you need to pay is calculated based on the property’s current value and whether you are eligible for an exemption or a concession.
When you acquire a property, whether as a gift, a purchase, or through a trust, you are required to pay duty on the dutiable value of the property. That said, a dutiable value can either be the price you paid for the property or its market value at the time of signing the contract, and it includes GST ( The Goods and Services Tax) payable.
Did you know: Stamp duty is just one of the many hidden costs of buying a house?
How Much Is Stamp Duty in Victoria?
You can calculate stamp duty based on a sliding scale that affects the amount you have to pay depending on the property’s worth.
According to the State Revenue Office in Victoria, as of July 2021, the general stamp duty rates that apply when you buy a property are as follows:
Note: You can use the Official State of Revenue stamp duty Victoria calculator for more accurate results.
When Do You Pay Stamp Duty in Victoria?
Every state has different regulations regarding the time period in which you must pay the stamp duty. However, in Victoria, regulations of land stamp duty require payment within the first 30 days of the settlement on the new house. In order to avoid any additional expenses in the form of penalties, it’s best to pay stamp duty on the day of the settlement and thus leave no room for late payments.
Did you know: Stamp duty is another factor to consider when you calculate buying someone out of the house
Victorian Stamp Duty Exemptions and Concessions
If you are a first-time home buyer and sign your contract on or after 1 July 2017, you may be eligible for duty exemption or concession. However, a contract signed before 1 July 2017 can grant you eligibility for a 50% duty reduction.
Note that these reliefs apply if the dutiable value of the property is $600,000 or less. On the other hand, if the property is worth over $600,000 and less than $750,000, you may be eligible to receive the first-time home buyer duty concession.
In addition to these exemptions, several other situations may result in not paying stamp duty in Victoria:
- Being an eligible pensioner
- Purchasing a property as your principal place of residence
- Purchasing off-the-plan
Note that each of them requires a unique set of conditions that you need to meet to obtain eligibility. Check a reliable government source to determine if you meet the criteria.
You might be interested in: First-Time Home Buyer Loans With Zero Down in Australia
Stamp Duty and Foreign Purchasers
As of 1 July 2015, the State Revenue of Victoria has imposed a new agreement upon foreign home purchases. When buying a residential property, a non-residential property with the intention of building a property to live in, or acquiring a property as a gift, foreigners need to pay an additional stamp duty of 8%.
A foreign purchaser is considered a person that’s not:
- An Australian citizen or permanent resident
- A New Zealand citizen with a Special Category Visa
It should be noted that foreign buyers who purchase a property with their spouse or partner who belongs to the previously mentioned citizens group can be exempt from paying additional stamp duty. Nevertheless, the foreign purchaser must use the property as a principal place of residence for a period of 12 months from the settlement day.
1. How do I avoid stamp duty in Victoria?
As a first-time home buyer in Victoria, you may be eligible for a stamp duty exemption. The requirements include buying a property for $600,000 or less and using it as a principal place of residence for 12 months minimum.
2. How much is stamp duty in Victoria on a $600K house?
The stamp duty for a house worth $600,000 is $31,070. Note that for any residential property that’s worth between $130,000 and $960,0000, homeowners need to pay $2,870 plus 6% of the dutiable value of the property.
3. What is the current stamp duty rate in Victoria?
The current stamp duty rate in Victoria starts at 1.4% and goes up to 6.5% of the dutiable value of the property, depending on the property’s worth. However, foreign purchasers need to pay an additional 8% unless they meet certain criteria.
