Every property purchase comes with costs beyond the deposit and mortgage. But, it’s the amount of land transfer duty (often referred to as stamp duty) payable that’s likely to surprise you. To complicate things, there’s no standard rate of stamp duty in Australia. Instead, each state has its own rates, and the money collected goes directly to the state for reinvesting in various sectors.
In this article, Greta Sabatino shares the 5 key things you need to know about stamp duty when purchasing a property in Victoria.
- Payment of stamp duty
Stamp duty is a one-off payment, with a due date that varies state by state. In Victoria, you are required to pay the stamp duty within 30 days of the transfer and before the title is transferred to your name. In most cases this means payment must be made at the time of settlement.
- The amount of stamp duty payable
The stamp duty you pay on the purchase of a property will be calculated as a percentage of the total cost of that property. The exact percentage you pay is a sliding scale that calculates the percentage rate depending on which threshold your ‘property value’ falls into. You can use the State Revenue Office stamp duty calculator to obtain the basic estimate of what you might have to pay.
- Stamp duty concessions in Victoria
Some property purchasers may be eligible for an exemption or discount on stamp duty. In Victoria, that includes first home buyers, pensioners, principal place of residence buyers, farmers, regional commercial or industrial property buyers and charities.
- Stamp duty in 2021
In Victoria, purchasers of residential property after 25 November 2020 and before 1 July 2021 have another reason to smile. To stimulate the economy, the government has introduced a 50 per cent reduction in stamp duty for new residential property purchases, and 25 per cent for existing residential properties and vacant land, where the dutiable value is less than $1 million. Purchasers may benefit from the waiver more than once if multiple contracts are entered into before 1 July.
- Stamp duty concession for off-the-plan purchases
The Victorian government does offer off-the-plan concessions to some who are buying their principal place of residence. However, there are a number of requirements that are outlined on the Victorian State Revenue Office Off-the-plan duty concession page that you need to be aware of, such as date of contract, start of construction and place of residence.
Robertson Hyetts has offices in central Victoria, and also advises clients in Melbourne, on the purchase of residential and commercial property, which includes stamp duty implications. It’s best to obtain a qualified lawyers’ advice on property purchase and stamp duty prior to signing any contract.
Contact us in Castlemaine on 5472 1588 or Bendigo on 5434 6666.