Before you buy a property, here is some information you need to know
1. You pay land transfer (stamp) duty on your purchase
When you buy or acquire a property, you will most likely have to pay land transfer duty (commonly called stamp duty). The amount of duty you pay depends on the value of your property and whether you are eligible for any exemptions or concessions or if you are a foreign purchaser.
2. There are exemptions and concessions
You may be eligible for exemptions and concessions from land transfer duty on your property, especially if you are buying a home.
Some concessions or exemptions are temporary:
You may be eligible for a land transfer (stamp) duty waiver for residential property with a dutiable value of $1 million or less, whether or not you use it as your principal place of residence. You must sign your contract on or after 25 November 2020 and before 1 July 2021.
If you buy a new residential property within the City of Melbourne local government area with a dutiable value of $1 million or less, you may be entitled to a land transfer (stamp) duty exemption or concession (where you pay only 50% of the duty otherwise payable). Different contract dates apply to the exemption and the concession.
3. Buying your first home
In addition to a land transfer duty exemption/concession, you may be eligible for a First Home Owner Grant. The grant is a payment made to you, whereas the duty exemption/concessions are a reduction in the amount of land transfer duty you pay. You can also refer to our comparison table to understand the differences between the First Home Owner Grant and the most common land transfer duty concessions and benefits, including the principal place of residence duty concession.
4. Outstanding land tax may affect your purchase
Generally, land tax outstanding on land is paid before you can become the new owner of your property. The issue of any land tax owing on the property is a matter for resolution between a vendor and purchaser as part of settlement.
5. The State Revenue Office (SRO) need to know you are the owner
It's important that the SRO know that you are the new owner so that they can update their land ownership records. They may also need to know if your property is in a congestion levy area or is on Melbourne's fringe. You should also be aware that as an ongoing owner, you may have to pay other taxes and levies. For example, from 1 January 2016, an absentee owner surcharge on land tax applies to Victorian land owned by an absentee owner.
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