About 200,000 properties change hands in Victoria each year. Most often they are bought or sold at auctions and private sales, but can also be gifted or acquired through a company or trust.
Whichever way you obtain your property, you must pay land transfer duty (previously known as stamp duty) on the transfer of the land from one individual to another. The amount of duty depends on the value of your property, how you use it, if you are a foreign purchaser, and if you are eligible for any exemptions or concessions.
Buying a property
You pay land transfer duty when you buy a home, including your first home, but also when you buy a property such as an investment property or holiday home, primary production land with or without water entitlements, a business (including land and goods), or fixtures, including tenant's fixtures.
Acquiring a property
You will also pay duty when you acquire property or an interest in property in some way other than buying it, for example, through a lease or as a result of a trust or a gift, a declaration of trust, a transaction effecting a change in the beneficial ownership of property, or an arrangement giving you an economic entitlement in relation to the land. Ownership or interest can be by way of an estate in fee simple, through a life estate, a Crown leasehold estate or land use entitlements.
Duty also applies on certain acquisitions in a company or unit trust scheme that has Victorian land holdings with an unencumbered value of $1 million or more.
Sub-sales of property
You may be liable for duty when you, as a purchaser under a contract or option arrangement, redirect the transfer of all or some of the property to someone else.
You can do this by nominating, assigning or entering into some other arrangement to pass your right to the transfer of all or any part of the property at settlement to another person.
These dealings in transfer rights to property may become a sub-sale when the transfer right is passed on:
- for additional consideration, and/or
- where there has been land development.
Each sub-sale of a property before settlement is deemed to be a transaction subject to duty unless an exemption applies. The duty on each sub-sale is payable on the eventual transfer of the property to the transferee.
Land transfer duty is calculated on the dutiable value of your property. This is the price you paid for the property or its market value, whichever is greater. Duty is calculated on a sliding scale, starting at 1.4 per cent for properties valued at $25,000 and rising to 5.5 per cent for those valued at or above $960,000.
This amount may vary if you are a foreign purchaser or are entitled to any exemptions or concessions.
Declarations of trust that do not declare a trust over land attract a flat $200 duty rate.
If you don't pay your duty within 30 days of settlement, penalty tax and interest may apply.
When you buy your property, your conveyancer/solicitor or bank will normally claim any exemption or concessions, organise and pay duty on your behalf via Duties Online. They can provide you with a duty statement to show how much duty has been paid.
A number of exemptions and concessions for land transfer duty are available. Many of these are aimed at homebuyers, but others include:
- Deceased estates – an exemption on a transfer of land by the executor of a deceased person to a beneficiary.
- Transfer between spouse or partner – an exemption for transfers between partners and spouses, including transfers arising out of a breakdown of a relationship.
- Regional commercial, industrial and extractive industries properties – a concession if you buy property in regional Victoria for commercial, industrial or extractive industry use under a contract entered into on or after 1 July 2019.
- Family farms – an exemption for the transfer of the family farm, depending on the class of the land, the nature of the transfer, and the status of the parties involved in the transfer.
- Young farmers – a one-off duty exemption/concession for young farmers buying their first farmland property.
- Corporate consolidation – an exemption where corporate groups form a single entity for tax purposes by interposing a company between the existing head trust or company and its unitholders or shareholders and all its subsidiary entities.
- Corporate reconstruction – an exemption where a corporate group reorganises its business structure (e.g. transferring assets between corporations that are members of the corporate group).
- Charities and friendly societies – certain exemptions from land transfer duty may be available.
More exemptions and concessions are available, especially for first-home owners and pensioners, and you may be eligible for more than one. Discuss these with your conveyancer and/or representative before settlement.
Importantly, you should complete all relevant forms before settlement and advise your conveyancer, solicitor and bank so that the right amount of duty can be calculated. If you believe you overpaid, you need to apply for a reassessment.
The timing of your exemptions, concessions or other benefits depends on the contract you sign to buy or build your new home, and whether you lodge your application directly with us or via an approved agent.
Digital Duties Form
Our Digital Duties Form is mandatory in Victoria for all property transfers. Taxpayers and their representatives must use the digital form for all contracts or agreements for land transfer duty.
A number of resources are available to help you understand the process.
Regular lodgers involved in the property conveyancing industry should apply to become a Duties Online registered user.
Members of the public who are not using a DOL registered user (usually a solicitor or conveyancer) and who want to lodge electronically as an individual can do so after a simple registration process. You can electronically lodge scanned documents for a land transfer of declaration of trust via our website after registering with us.
Your obligations and responsibilities
You must always provide us with true and accurate information. If we find you provided false or misleading statements or do not meet any requirements for a duty benefit (such as the residency requirement) you will be ordered to repay any duty amounts and may also face penalties.
If you believe that you overpaid duty when you bought your property, because, for example, you were eligible for a benefit but didn’t claim it, you can apply for a duty reassessment. If we find you eligible for the benefit, we will refund overpaid duty.
To apply for a reassessment, send us a cover letter and the completed application forms for the relevant exemption, concession or reduction/s and any supporting documents.
Your request must be made within five years of paying the duty.
The amount of your refund depends on a number of factors, including the settlement date and the value of your property at the time duty was paid. We receive large volumes of refund applications so your case can take up to 60 days to process.
Getting it right
Our priority is to help you pay the right amount of tax at the right time. Learn more about how we do this.