Buying a property in Victoria can involve a significant additional cost known as stamp duty, officially called land transfer duty.
Many buyers ask:
“When do I need to apply for stamp duty?”
“Do I need to apply for a concession before settlement?”
“When do I actually pay the stamp duty?”
“What happens if I am a first home buyer?”
These questions are important because being eligible for a concession or exemption and actually completing the duty requirements are two different things.
This article explains the general process for Victorian residential property buyers and when you should raise the issue with your conveyancer.
What Is Stamp Duty in Victoria?
Stamp duty is commonly used to describe land transfer duty, which is a Victorian government tax that may apply when you acquire property or land.
The amount of duty depends on factors such as:
- The value of the property
- The type of transaction
- Whether you are an individual, company or trust
- Whether you are eligible for a concession or exemption
- Whether the property will be your principal place of residence
- Whether you are a first home buyer
- Other circumstances affecting the transaction
The applicable rules depend on the particular purchase.
Do I Have to Pay Stamp Duty When Buying a Property?
Not every buyer pays the same amount of duty.
Some buyers may qualify for:
- A full exemption
- A partial exemption or concession
- A principal place of residence concession
- A first home buyer exemption or concession
- Other duty concessions available under Victorian law
Your eligibility needs to be assessed based on your circumstances and the property you are purchasing.
You should tell your conveyancer as early as possible if you think you may qualify for a concession or exemption.
What Is the First Home Buyer Stamp Duty Exemption or Concession?
Victoria provides a stamp duty exemption or concession for eligible first home buyers.
For eligible purchases with a dutiable value of up to the applicable threshold, no duty may be payable.
A concession may apply where the dutiable value is above the exemption threshold but within the relevant concession range.
The thresholds and eligibility requirements can change, so buyers should check the current Victorian State Revenue Office requirements when purchasing.
You should also tell your conveyancer before settlement if you believe you qualify.
When Should I Tell My Conveyancer About a Stamp Duty Concession?
As early as possible — preferably before settlement.
When you first engage your conveyancer, tell them if you believe you may qualify for a duty concession or exemption.
For example, you may be:
- A first home buyer
- Buying the property as your principal place of residence
- Eligible for another concession
- Eligible for a particular exemption
Your conveyancer can then consider the relevant duty requirements as part of the conveyancing process.
Do not wait until settlement day to mention that you think you qualify for a concession.
Do I Need to Apply Before Signing the Contract?
Not necessarily.
In many transactions, the relevant duty assessment occurs as part of the conveyancing process after the contract has been entered into.
However, this does not mean you should wait until after signing to find out whether you qualify.
If your decision to purchase depends on receiving a particular concession or exemption, it is sensible to investigate your eligibility before signing the Contract of Sale.
This is particularly important for first home buyers who are budgeting for their purchase.
When Is Stamp Duty Paid?
The timing of duty payment depends on the transaction and the applicable Victorian duty requirements.
For a standard property purchase, duty generally needs to be dealt with before the transfer can be registered.
Your conveyancer will arrange the relevant duty assessment and settlement requirements.
The amount of duty payable should be confirmed before settlement so that the buyer knows how much money needs to be available.
Does Stamp Duty Have to Be Paid Before Settlement?
The duty requirements need to be satisfied within the relevant timeframe for the transaction.
In an electronic conveyancing transaction, your conveyancer will generally arrange the duty assessment and payment as part of the settlement process where appropriate.
The exact timing can depend on the transaction and the relevant duty rules.
This is why your conveyancer will usually ask you for information about your eligibility and circumstances well before settlement.
Can Stamp Duty Be Paid at Settlement?
In many electronic conveyancing transactions, duty is dealt with as part of the electronic settlement process.
Your conveyancer can arrange the relevant duty payment from the settlement funds or other funds provided for settlement, depending on the circumstances and transaction arrangements.
You should not assume that you can simply leave stamp duty unpaid after settlement.
Ask your conveyancer how the duty will be dealt with for your particular purchase.
What Happens If I Qualify for a Full Exemption?
If you qualify for a full duty exemption, the amount of duty payable may be reduced to $0.
However, this does not mean that nothing needs to be done.
Your conveyancer may still need to obtain the appropriate duty assessment and evidence of the exemption as part of the transaction.
In other words:
No duty payable does not necessarily mean no duty process.
The relevant exemption still needs to be properly claimed and recorded.
What Happens If I Qualify for a Concession?
A concession reduces the amount of duty you would otherwise have to pay.
For example, an eligible first home buyer may receive a partial reduction in duty where the purchase falls within the applicable value range.
The amount of the concession depends on the relevant rules and the dutiable value of the property.
Your conveyancer can assist with the conveyancing aspects of the duty process and explain what information is required.
What Is the Principal Place of Residence Concession?
Victoria may provide a principal place of residence concession for eligible buyers who acquire a property to use as their home.
The concession has eligibility requirements, including requirements relating to occupation of the property.
It is important not to assume that simply intending to live in the property automatically means you qualify.
Your circumstances need to be considered against the current requirements.
What If I Am Buying an Investment Property?
Different duty rules may apply where you are purchasing an investment property.
You may not qualify for concessions that are specifically available to owner-occupiers or first home buyers.
If you are purchasing an investment property, tell your conveyancer before settlement.
Your intended use of the property can be relevant to determining whether particular concessions or exemptions are available.
What If I Am Buying the Property With Someone Else?
If two or more people are buying a property together, the duty position can depend on the circumstances of each purchaser.
For example, one purchaser may be a first home buyer while another purchaser has previously owned property.
This does not necessarily mean the transaction will receive the same treatment as a purchase by an eligible first home buyer buying alone.
The ownership structure and circumstances of each purchaser should be considered before relying on a concession.
If you are buying with another person, tell your conveyancer about your circumstances early.
What If I Have Previously Owned Property?
Being a first home buyer is generally subject to eligibility requirements.
You should not assume that you qualify simply because you have never previously purchased a particular type of property.
Previous ownership interests and other circumstances can be relevant.
If you are unsure whether you qualify, obtain appropriate advice before relying on a first home buyer concession.
What If I Buy a Property Before Selling My Existing Home?
This can raise additional questions about your eligibility for particular concessions.
For example, if you already own or have previously owned property, you may not qualify for a first home buyer concession.
The fact that you intend to sell your existing property does not automatically make you a first home buyer.
Tell your conveyancer about your current and previous property ownership before settlement.
What If I Am Buying With a Spouse or Partner?
Your partner’s circumstances can be relevant to the duty position.
If you are relying on a first home buyer concession, both purchasers’ circumstances may need to be considered.
For example, if one person has previously owned property, this can affect the availability of a first home buyer benefit.
Do not assume that one purchaser’s eligibility automatically means the entire purchase receives the concession.
What Documents Might I Need?
The documents required depend on the concession or exemption being claimed.
Your conveyancer may ask you to provide information or evidence relating to:
- Your identity
- Your previous property ownership
- Your intended occupation of the property
- Your relationship status, where relevant
- The purchase price
- The ownership structure
- Other information required for the duty assessment
Provide requested information promptly so there is enough time to complete the duty process before settlement.
What Happens If I Give the Wrong Information?
Stamp duty concessions and exemptions have eligibility requirements.
If incorrect information is provided, the duty assessment may be incorrect.
This can potentially result in additional duty, interest, penalties or other consequences.
If your circumstances change, tell your conveyancer as soon as possible.
For example, if you originally intended to occupy the property but your plans change, this may affect a concession that depended on you occupying the property.
What If I Am Not Sure Whether I Qualify?
Don’t guess.
Tell your conveyancer what your circumstances are and ask whether further investigation is required.
Where a question involves the interpretation of tax or duty legislation, you may need advice from the Victorian State Revenue Office or an appropriately qualified tax or legal adviser.
Your conveyancer can assist with the conveyancing and transaction process but should not be relied upon for tax advice outside their scope.
What Happens If Stamp Duty Is Not Paid on Time?
Failing to deal with duty within the required timeframe can cause problems with the transaction.
There may be additional amounts payable, including interest or penalties, depending on the circumstances.
It can also affect the ability to register the transfer.
This is why duty should be dealt with well before or as part of settlement rather than left until after settlement.
Can Stamp Duty Be Added to My Home Loan?
This depends on your lender and loan arrangements.
Stamp duty is generally a purchase cost rather than part of the property’s purchase price.
Some buyers may arrange sufficient finance to cover their overall purchasing costs, while others need to provide additional funds.
Speak with your lender or mortgage broker about how your loan is structured.
Your conveyancer can tell you how much money is required for settlement, but your lender determines your loan arrangements.
How Much Money Should I Have Available for Settlement?
Your conveyancer will prepare the settlement figures before settlement.
The amount you need to provide can include:
- The balance of the purchase price
- Stamp duty, where applicable
- Registration fees
- Conveyancing fees
- Search fees and other outlays
- Settlement adjustments
- Other transaction costs
If you are relying on a stamp duty concession or exemption, make sure your conveyancer knows before the settlement figures are finalised.
What Should First Home Buyers Do?
If you are a first home buyer, tell your conveyancer as soon as you purchase the property.
Do not wait until the day before settlement.
Your conveyancer can then check the relevant duty requirements and make sure the transaction is prepared on the correct basis.
You should also make sure you understand any occupation requirements attached to the concession you are claiming.
Simple Stamp Duty Checklist for Buyers
Before settlement, ask yourself:
☐ Have I told my conveyancer whether I am a first home buyer?
☐ Have I disclosed any previous property ownership?
☐ Have I told my conveyancer whether I will live in the property or rent it out?
☐ Have I provided all requested information?
☐ Has my duty assessment been completed?
☐ Do I know whether I qualify for a concession or exemption?
☐ Do I know how much duty I need to pay?
☐ Do I have sufficient funds available for settlement?
☐ Have I told my conveyancer if my circumstances have changed?
A Simple Example
Imagine a buyer agrees to purchase a Victorian property for $600,000.
The buyer believes they may qualify for a first home buyer duty benefit.
Instead of simply assuming that no stamp duty will be payable, the buyer should tell their conveyancer about their circumstances.
The conveyancer can then consider the applicable duty requirements and arrange the relevant assessment.
If the buyer qualifies for a full exemption, the duty payable may be $0.
If the buyer qualifies for a concession, a reduced amount may be payable.
If the buyer does not qualify, the standard duty calculation may apply.
The important point is:
Eligibility should be checked before relying on the concession when budgeting for the purchase.
Frequently Asked Questions
When should I tell my conveyancer I may qualify for a stamp duty concession?
Tell your conveyancer as early as possible, preferably when you first engage them for the purchase.
Do first home buyers always pay no stamp duty?
No. The availability and amount of a first home buyer exemption or concession depends on the applicable eligibility requirements and property value thresholds.
Do I need to apply for stamp duty before signing the Contract of Sale?
The duty assessment process generally occurs after the transaction is entered into, but you should investigate your eligibility before signing if the concession is important to your decision to purchase.
Can stamp duty be paid at settlement?
In many electronic conveyancing transactions, duty is dealt with as part of the settlement process. Your conveyancer will explain how it will be handled for your transaction.
What if I don’t qualify for a stamp duty concession?
You may need to pay the applicable duty amount. Your conveyancer can calculate or confirm the amount required for settlement.
What if I have previously owned a property?
Previous ownership can affect eligibility for some concessions, including first home buyer benefits. Tell your conveyancer about your previous property ownership.
What if I am buying an investment property?
Different concessions may apply. Tell your conveyancer if you intend to rent the property out rather than occupy it as your home.
Can my partner’s previous property ownership affect my first home buyer concession?
It can, depending on the circumstances and applicable rules. If you are purchasing jointly, your conveyancer should know each purchaser’s relevant property ownership history.
What happens if I claim a concession but later don’t meet the requirements?
The duty position may need to be reassessed. Additional duty, interest or penalties may apply depending on the circumstances.
How Prox Conveyancing Can Help
Buying a property involves more than signing a Contract of Sale and arranging finance.
Understanding the stamp duty position early can help you budget correctly and avoid surprises before settlement.
At Prox Conveyancing, we assist Victorian buyers with the conveyancing aspects of their property purchase, including settlement preparation and the duty process.
If you think you may qualify for a stamp duty concession or exemption, tell us as early as possible so the relevant requirements can be considered as part of your conveyancing matter.
About the Author
Meet Sally
Sally Kwok is a Licensed Conveyancer and the Director of Prox Conveyancing. With more than 16 years of experience in the conveyancing industry, she is committed to helping buyers and sellers navigate Victorian property transactions with confidence. Sally is passionate about providing clear communication, practical guidance and personalised service throughout every stage of the conveyancing process.
👉 Learn more about Sally on our About page.
About Prox Conveyancing
Prox Conveyancing is a Victorian conveyancing practice providing professional conveyancing services for residential property transactions across Victoria. We assist buyers, sellers, investors and families with a wide range of conveyancing matters, delivering personalised service, transparent communication and professional support from contract through to settlement.
👉 Learn more about Prox Conveyancing on our About page.
This article provides general information only and is not legal, financial or tax advice. Stamp duty rules, thresholds, concessions and exemptions can change, and eligibility depends on the circumstances of each transaction and purchaser. For current duty requirements, please check the Victorian State Revenue Office information or obtain appropriate professional advice.