Stamp Duty Exemptions in Victoria

Stamp duty is a significant financial consideration when purchasing property in Victoria. However, not all property transactions are subject to this tax, as the government has implemented various exemptions to support certain categories of buyers and stimulate the real estate market. In this comprehensive guide, we will delve into the world of stamp duty exemptions in Victoria, exploring the eligibility criteria, the types of exemptions available, and the process of claiming them.

Understanding stamp duty exemptions in Victoria

Before we dive into exemptions, let's first understand what stamp duty is and why it matters in the context of property transactions in Victoria.

What is stamp duty in Victoria?

First things first - what is stamp duty? Simply put, stamp duty, or land transfer duty, as it’s known in Victoria, is a tax the state government charges when you buy or are given a property. How much you pay in stamp duty varies depending on the dutiable value of your property and whether you’re eligible for any further discounts or concessions.  The dutiable value of your property refers either to the price you paid for it, or its market value (whichever is greater). However, this means anyone who has been gifted a property, acquired it through a trust or bought it at a significant discount will still have to pay stamp duty in some form. Why does it matter? After paying a significant amount for a house deposit, many people also wonder why they need to fork out for stamp duty. Without going into too much detail, the government uses the revenue generated from stamp duty to support essential services and infrastructure, such as healthcare, education, and transport. It helps to regulate the property market by discouraging speculative investments, thus maintaining a balance in the market dynamics. Read one of our latest blogs: how much deposit should I really be aiming for?

Types of stamp duty exemptions in Victoria

The Victorian government has introduced several exemptions to ease the financial burden of stamp duty on specific property transactions. These exemptions are aimed at different categories of buyers, and understanding them is vital for anyone interested in purchasing property in the state.

1. First home buyer exemption

The first home buyer exemption in Victoria is one of the most well-known concessions. Under this scheme: 

• Properties with a dutiable value of $600,000 or less can receive the first home buyer stamp duty exemption.
• Properties with a dutiable value of $600,001 to $750,000 can receive the first home buyer stamp duty concession. The concession amount is based on a sliding scale.
• First home buyers purchasing a property valued at more than $750,000 receive no stamp duty relief under this scheme.

2. Principal place of residence (PPR) exemption

Stamp duty concession isn’t just for first home buyers - you may also be eligible for a concession if you buy a property you intend to live in as your home. To qualify for the principal place of residence (PPR) exemption, the dutiable value of your property must be between $130,000 and $550,000. You must also intend to use that property as your principal place of residence for a continuous period of 12 months within 12 months of settlement.

3. Off-the-plan concession

If you’ve decided to buy off-the-plan (such as a house and land package), you may be eligible for an off-the-plan concession. This exemption works by reducing the dutiable value of your home so you only pay part of the stamp duty you otherwise would have. In this instance, the dutiable value is calculated as the contract price minus any construction costs incurred on or after the contract date.  

4. Pensioner concession

For eligible pensioners, the government may offer a once-off pensioner concession on stamp duty. Eligible pension card holders can receive an exemption from stamp duty when purchasing a property valued at $330,000 or less or a stamp duty concession when purchasing a property between $330,001 and $750,000. Speak with an Inovayt financial advisor to understand pensioner stamp duty consessions and how they could best suit your personal circumstances.

The process of claiming a stamp duty exemptions in Victoria

Understanding the available exemptions is only the first step. To successfully claim a stamp duty exemption in Victoria, buyers need to follow a specific process: 1. Confirm your eligibility The first step to deciding whether you’re eligible for an exemption is to check the criteria for the listed exemption. Be sure to check with your Inovayt mortgage broker whether you are eligible for the exemption and any other exemptions you might qualify for.  2. Gather important documents Step two is about pulling together relevant documents and information that will support your application. This may include any payslips, identification, debts, savings, etc, that will help to determine your financial position.  3. Seek professional advice If you haven’t already done so, seek financial advice. It can be tricky to know which exemption suits your needs, and in some cases, you may qualify for multiple concessions. Our team of expert mortgage brokers are across all government incentives in your state and can assist you with the application process.  4. Submit your application With the help of your Inovayt Melbourne mortgage broker, it’s time to submit your exemption application. Your mortgage broker is here to simplify the process by assisting you with your application or submitting it on your behalf. 5. Wait for approval Once your application is submitted, you’ll need to wait for approval from the relevant department. This can take a few weeks, depending on how complex your application is. 6. Complete your property purchase Once your exemption or concession is approved, it’s time to purchase your property! 

How can an Inovayt broker assist with stamp duty exemptions in Victoria?

Stamp duty exemptions in Victoria play a significant role in shaping the property market and making homeownership more accessible for various segments of the population. Understanding the types of exemptions available and the process of claiming them is essential for anyone considering a property purchase in the state. While exemptions provide valuable financial relief, it's crucial to ensure that you meet all eligibility criteria and follow the application process accurately. Seeking professional advice from an Inovayt mortgage broker and staying informed about potential changes to stamp duty exemptions in Victoria to help you make informed decisions about your property investments.