Who Pays Stamp Duty in Victoria? 

Buying property in Melbourne is exciting, but the flurry of fees and taxes can feel overwhelming. One of the biggest questions first-time buyers and seasoned investors alike still ask is, "Who actually pays stamp duty in Victoria?" Below is a clear, up to date explainer that unpacks the rules, outlines the latest concessions and highlights practical tips so you can budget with confidence.

What Is Stamp Duty?

"Stamp duty" is simply the older name for land transfer duty a state tax levied when real estate changes hands. It is calculated on the dutiable value (usually the higher of the purchase price or market value) and is collected by the State Revenue Office (SRO). The government uses the revenue to fund roads, hospitals and other essential services.

Who Pays Stamp Duty in Victoria?

Under Victorian legislation, the purchaser (also called the transferee) is liable for stamp duty, not the vendor. The SRO's guidance is explicit: "You pay land transfer (stamp) duty on your purchase" State Revenue Office . Vendors cannot pass this cost to you in the contract, even by adjusting the sale price.

Land Tax vs Stamp Duty

Historically vendors could request buyers to pick up unpaid land tax at settlement, but from 1 January 2024 the Victorian Government banned vendors from passing on land tax where the contract price is below $10.4 million for 2025 State Revenue Office . Stamp duty, however, remains entirely the buyer's responsibility regardless of property value.

How Much Will You Pay?

General Residential Rates (2025)

Additional or 'Surcharge' Duty

• Foreign purchaser additional duty: + 8% State Revenue Office
• Premium property duty: the 6.5% top rate applies to residential property over $2 million.

Commercial & Industrial Property

From 1 July 2024, commercial and industrial real estate began transitioning to a new Commercial and Industrial Property Tax (CIPT). Eligible properties pay stamp duty one final time on the "entry transaction"; ten years later an annual 1% tax on site value commences State Revenue Office . Residential property is not affected, so home buyers still face the regular stamp duty schedule.

When and How Is Duty Paid?

Although the law gives you 30 days from settlement to pay, modern electronic conveyancing means your conveyancer or bank usually collects duty at settlement so the title can be registered immediately. If payment is late, penalty interest and tax apply, so always confirm your representative has lodged the Digital Duties Form and arranged payment before settlement day.

Key Exemptions and Concessions for Melbourne Buyers

Victoria offers a generous suite of reductions designed to help particular buyer groups.

First Home Buyer (FHB) Duty Waiver or Concession

• Full exemption on a principal place of residence (PPR) valued up to $600,000
• Sliding concession for PPRs valued $600,001–$750,000 State Revenue Office
• Can be combined with the $10,000 First Home Owner Grant on new builds.

Principal Place of Residence Concession

Where your new home's dutiable value is ≤ $550,000 and you move in within 12 months you may qualify for a lower duty rate State Revenue Office .

Off-the-Plan Concession

For contracts signed 21 October 2024 – 20 October 2025, buyers of off-the-plan apartments or townhouses only pay duty on the land component, not construction costs. This can save up to $28,000 on a $620,000 purchase State Revenue Office .

Pensioner Exemption/Concession

Eligible pensioners receive a one off full exemption for a new or established home up to $600,000, or a concession for properties up to $750,000 State Revenue Office .

Spouse or Partner Transfers

Since 1 July 2017, only principal residences transferred for no consideration between spouses are duty free; investment or holiday homes no longer qualify State Revenue Office. Transfers due to divorce or relationship breakdown remain exempt State Revenue Office .

Special Category Exemptions

• Special disability trusts
• Young farmer concession on farmland
• Charitable or public benevolent institutions
• Deceased estates meeting strict criteria

Discuss eligibility with your conveyancer well before settlement so the correct concession is claimed up front. If you overpay, you may still seek a refund, but it adds delay and paperwork.

Practical Tips to Budget for Duty

• Use the SRO calculator early. Enter your contract date and price to obtain an estimate and flag any concessions State Revenue Office .
• Allow for surcharge duty if any purchaser is a foreign citizen. Even 1% ownership by a foreign person can trigger the extra 8%.
• Account for premium duty on prestige homes above $2 million a common threshold in inner-east suburbs like Hawthorn or Brighton.
• Check the land tax position via a property clearance certificate so there are no nasty surprises on settlement State Revenue Office .
• Submit the Digital Duties Form promptly. Without it, electronic settlement cannot proceed.
• Keep settlement funds liquid. Stamp duty cannot be paid by credit card on the day your bank needs cleared funds.

Common Mistakes Melbourne Buyers Make

• Assuming the vendor pays. In Victoria the buyer always bears stamp duty.
• Missing the 30 day deadline when a manual lodgement is required, for example with complex trust structures.
• Claiming the wrong off the plan base value. The SRO regularly audits incorrect calculations State Revenue Office .
• Forgetting to factor foreign surcharge duty when children or parents overseas are added to the title.
• Failing to reside in the property for 12 months after receiving a PPR or FHB exemption, which can claw back the concession with interest.

What About Stamp Duty Reform?

Many economists argue annual land tax is more efficient than one off stamp duty because it encourages transactions. Victoria's CIPT for commercial and industrial property is the first step towards that model. Residential buyers may wonder if similar reform is coming. While the government continues to review options, no legislation has been introduced to remove stamp duty on homes. So for the foreseeable future, Melbourne purchasers should continue to budget for the lump sum duty at settlement.

How Pearson Chambers Conveyancing Can Help

Calculating and claiming the correct duty concession can save tens of thousands of dollars, but the rules are nuanced and paperwork-heavy. At Pearson Chambers Conveyancing our experienced team:

• Prepares and lodges the Digital Duties Form
• Identifies every eligible exemption
• Works with your lender to ensure accurate funds at settlement
• Provides a free Section 32 contract review so hidden duty traps are spotted before you sign

Conclusion – Next Steps for Melbourne Buyers

Knowing you, the buyer, pay stamp duty in Victoria is only the first step; understanding when it is due, how it is calculated and which concessions apply can make or break your budget. Before you commit to a property, have your contract reviewed, crunch the duty figures and map out your cash flow.

Ready for personalised guidance? Contact Pearson Chambers Conveyancing today for expert advice and your complimentary Section 32 review:

• Phone: 03 9969 2405
• Email: contact@pearsonchambers.com.au