MDL Conveyancing 

Victorian Stamp Duty

                              by Michelle Day-Lewis – licensed conveyancer 

To start things off, we should consider what is stamp duty? Originally paid in postage stamps and attached to title parchments, stamp duty is a tax that is levied by the State Government to fund amongst other things, schools, hospitals, roads and public transport. Stamp duty is collected across a number of transactions, including property transfers, land tax, payroll tax and insurances. It is estimated that for the 20-21 financial year the tax collected from property transfers in Victoria equate to around 20% of the total taxation income of the Victorian Government. Combined with land tax, the Victorian Government expects to receive around $8,057.3mil equating to just over 38% of the Government’s income from taxation in the current financial year.

Now that we have established that paying stamp duty is a necessary part of life for the average Victorian looking to purchase their home it is time to consider what benefits are available to those who intend to live in their new property as the primary residence.

First up for those excited youngsters looking to plant their feet into their brand spanking new house of their very own, we have the First Home Buyers Grant and Stamp Duty Waiver. The Victorian Government is offering grants of up to $20,000.00 to eligible regional purchasers who are buying a brand new home to live in. For our metropolitan counterparts the grant is $10,000.

For first home buyers who are looking at purchasing an existing property, you are entitled to a one-off duty exemption for a property valued up to $600,000.00 or a concession on a sliding scale for a principal place of residence (PPR) from $600,001 t0 $750,000.

The Victorian Government offers a once-only duty exemption when a pensioner purchases a home valued at $330,000.00 or less, or a once-only duty concession on a sliding scale when a pensioner purchases a home valued between $330,001 to $750,000.

For those who are looking to buy their own residence but have either already bought a dwelling in the past or are not able to make use of the above concession, grants or exemptions there is one last option available to you where the dutiable value of the property is less than $550,000. The Victorian Government has a Principal Place of Residence duty concession available to you. The amount of the reduction is $3,100 however this is, again, based on a sliding scale. If you purchased a property valued at $550,000 you would pay $28,070 in stamp duty  however with the concession applied you would only pay $24,970. Perhaps it’s not enough to make you want to run out and buy a new house every year (just the thought of that hurts my head… removalists, new schools, redecorating - ouch!!) whatever doesn’t add to your mortgage helps. If you were to purchase a property at the lighter end of the scale, say $250,000, you would save an amount of $1,200 and only pay $8,870.



If none of the above apply to you then there are measures from both the Federal and State Governments to assist in keeping the economy going after the impact felt by all from the coronavirus.

Coronavirus (Covid-19) measures

While Melburnians have been attempting online cooking classes, virtual gym sessions and all manner of house renos as a result of lockdown (I absolutely love my new kitchen cupboard!), the Australian Government has released measures to help reinforce the constructions industry. There are grants of $15,000 available to eligible owner-occupiers to either build or substantially renovate an existing home up to $850,000, so long as you sign a contract between 1 January 2021 and 31 March 2021.

The Victorian Government has announced a duty waiver for residential properties in transactions of properties where the dutiable value is up to $1million. New properties will have a 50% stamp duty waiver and existing residential properties and vacant residential land will have a 25% stamp duty waiver. This waiver is in place for contracts signed after 25 November 2020 and prior to 1 July 2021.

As mentioned before, there is criteria that needs to be met to be eligible for grants and reductions or exemptions of stamp duty. At MDL Conveyancing we can help you navigate through the criteria and provide you with assistance in purchasing your next property. Thinking of buying? Call Michelle. 

https://www.dtf.vic.gov.au/state-financial-data-sets/state-taxation-revenue

https://www.sro.vic.gov.au/first-home-owner

https://treasury.gov.au/coronavirus/homebuilder

https://www.sro.vic.gov.au/land-transfer-duty-waiver-residential-property-transactions-1-million

https://www.e-business.sro.vic.gov.au/calculators/land-transfer-duty