Before you buy, understand how stamp duty affects you

What is Stamp Duty?

Stamp duty is  also known as Land Transfer Duty, a necessary tax payment which occurs in nearly every property transaction. It is often the largest cost apart from the property price so it’s important for you to be aware of the estimated amount while preparing your financing and budget.

How to calculate your duty amount?

Stamp duty is not a set percentage or fixed rate but instead is determined by a sliding scale depending on the value of the property. The amount of duty payable depends on the value of the property and whether you are eligible for any exemptions or concessions.

If you are a foreign purchaser, you will most likely be required to pay additional duty under Australia’s Foreign Investment Policy.

The below table sets out the Victorian thresholds for calculating the total duty payable for a property transaction:

*Source: https://www.sro.vic.gov.au/principal-place-residence-current-rates

When do I need to pay stamp duty?

Stamp duty needs to be paid within 30 days of the transaction. For property transactions however since most settlements are completed online via electronic conveyancing, stamp duty will automatically be disbursed to the State Revenue Office during settlement. 

Purchasers are responsible for ensuring they have sufficient funds at settlement to cover the payment of stamp duty.

Can I apply stamp duty concessions and exemptions?

The concessions available depend on the type of purchaser you are and the type of property or land that you are purchasing. That is, whether you are first home buyer, a concession card holder, a foreign investor or a standard owner occupier.

Some common exemptions and concessions that might be available to you as a purchaser include:

  • Principal place of residence (PPR) concession: a duty concession for when a property you buy, valued up to $550,000, is intended as your primary home
  • First-home buyer duty reduction: a one-off duty reduction for a PPR valued up to $600,000
  • Off-the-plan concession: a duty concession for an off-the-plan property, either as a land and building package, or as a refurbished lot
  • Pensioner concession: a one-off duty exemption or concession for a new or established home valued up to $750,000
  • First-home owner with family exemption/concession: a one-off duty exemption or concession for properties valued at $200,000 or less
  • Young farmer’s exemption/concession: a one-off duty exemption/concession for young farmers buying their first farmland property
  • Deceased estates: an exemption on a transfer of land by the executor of a deceased person to a beneficiary

For more information, please refer to: www.sro.vic.gov.au/land-transfer-duty

How can Wealthsource help?

The process of claiming stamp duty through the State Revenue Website is part of our conveyancing services. As an award-winning conveyancing firm, we can help you with all conveyancing related matters. If you have any questions, do not hesitate to email us at [email protected] or call us on +61 3 9590 618. Our expert team can answer any queries and we work hard to ensure your sale or purchase experience is as stress-free and straightforward as possible.