Westgate Conveyancers

stamp duty victoria
Wednesday, Mar 06, 2024

Stamp Duty Victoria

Written by westadmin

Stamp duty is applicable in Victoria for all land transfers, including gifts. The purchaser must pay a land transfer duty equal to either the property's market value or the consideration (price paid), including any GST, unless a discount or exemption applies.

Victoria stamp duty rates are determined by the state governments based on specific regulations regarding responsibility; therefore, they differ from one another. Nonetheless, stamp duty will rise in tandem with property prices across the board. Your eligibility for exemptions and concessions will determine the final amount you pay, along with the value of your properties and the state in which you reside.

As a result of differences in calculation between the respective state tax offices, stamp duty in other parts of Australia, such as Melbourne and Brisbane, will appear different.

What is stamp duty in Victoria?

Stamp duty applies to real estate purchases. Stamp duty is a part of the property's acquisition price paid to Victoria. Victorian stamp duty averages tens of thousands, in addition to their deposit, mortgage, and other home-buying fees.

Victorian Stamp Duty Exemptions and First-Time Buyers

Up to $600,000 in stamp duty is free for first-time buyers in Victoria. Only citizens of Australia can make a purchase. Even for homes with a value higher than this, first-time purchasers can be eligible for a discount. You can't buy a run-down house as an investment; it has to be your primary abode. As a first-time buyer, you'll have to fork over $32,141 to cover the home's dutiable value of $725,000.

Additional exemptions exist for some groups, such as qualifying pensioners, beneficiaries of a decedent's estate, off-the-plan buyers, and farm exemptions. The State Revenue Office in Victoria is the place to go if you think you might qualify for a Victorian stamp duty exemption or discount.

When do you pay stamp duty (VIC)?

The land transfer duty must be paid when the property is sold. If stamp duty is not paid within 30 days of settlement, fines and interest may apply.

Who is eligible for the Victorian stamp duty concessions on house buyer duty?

  • No prior exemptions or concessions under this plan are valid for this one-time offer.
  • Unless you get a waiver, you must be at least 18 years old when the settlement or building is done.
  • Either one of the applicants must be an Australian national or live there permanently.
  • You have to live in the house as your main home for at least twelve months, starting within the first year of settlement or building completion.
  • Before July 1, 2000, you did not live in Victoria.

Older citizens and those with concession cards

For house purchases under $750,000, seniors and concession card holders may qualify for a one-time Victorian stamp duty exemption. For this advantage to apply, the homeowner must have the intention of making the house their principal residence.

Land Transfers Within Families

When transferring property to one another, married couples or domestic partners are not required to pay stamp duty. The property has to be your primary residence for this to be applicable. This also applies when giving property as a present to members of your immediate family, including siblings and children.

Problems with stamp duty

There have been issues with the continuous payment of stamp duty for many years. According to the Victorian State Budget for 2023–2024, land transfer duty would bring in $7,360,000,000. As critics have pointed out, stamp duty is an outdated levy that puts a financial burden on a lot of people. It is also the main cause of a noticeable shift in the patterns of property purchases.

stamo duty victoria

An obsolete tax

Stamp duty originated in an antiquated governmental system. In the past, land transfers were few, and property transactions were not documented as thoroughly as they are now. 

Moreover, the process of finalising a sale and authenticating the sale documents with a physical stamp required additional government time. Stamp duty in Victoria was implemented to ensure the government received taxes from property owners, although land transactions have evolved significantly since its introduction. 

Currently, governments find the procedure easier due to the availability of precise and current records for all land parcels in Victoria. Given the evolution of property transactions, it is reasonable to consider adjusting the associated taxes accordingly.

Stamp duty expense

Acquiring real estate is one of the most substantial investments that a typical Australian makes over their lifetime. It is an exhilarating aspiration that many of us strive for. Simultaneously, it presents a significant financial hurdle to surpass. Real estate

Prices in Victoria have significantly increased over the previous few decades and currently exceed the average salary by a large margin. Stamp duty is a hefty tax that is imposed when the gap between the average earnings and the average property price is at its widest.

Changes in behaviour

The expense of stamp duty has significantly influenced behavioural shifts in the home-buying market. The increase in stamp duty in Victoria has hindered individuals from entering the real estate market. Furthermore, it acts as a disincentive for individuals considering relocating to a new residence. Some families may opt to repair or enlarge their existing home to avoid incurring additional stamp duty while moving. Retirees frequently remain in unsuitable homes due to the high expense of downsizing, particularly in stamp duty.

Stamp duty and foreign buyers

Foreign buyers acquiring residential property in Victoria may be subject to an extra duty of up to 8% in addition to the land transfer duty. This pertains to those who are not Australian citizens, permanent residents, or New Zealand citizens with a Special Category Visa.

Final Words

Stamp duty is directly proportional to the property's valuation. If you qualify for any exemptions or Victorian stamp duty concessions, your stamp duty liability will be determined by factors such as the state in which you reside and the value of the property. If you want to acquire real estate in Victoria, you've probably heard about it. 

The market value of your residence is used to calculate stamp duty. First-time homebuyers or those purchasing a main house may be eligible for discounts. Foreign residents are required to pay an extra 8%. At Westgate Conveyancing, we ensure to support you with first-hand knowledge and help with all documents and payments mandated by law. Book an appointment soon!!