Stamp duty is an expensive part of every property purchase, so why wouldn't you want save tax with a stamp duty discount. In this guide we're listing every stamp duty exemption and concession in Victoria. Make sure you ask your lawyer what discount you may be eligible for before you settle your conveyancing transaction.
Stamp Duty Discount Vic
Click the links below to jump to the discount or exemption you're interested in. We've listed every duty discount when buying property in Victoria.
1. Principal Place of Residence (PPR) Duty Concession
The first discount is the principal place of residence concession. It gives a small discount as noted below. You can get it if you meet the following requirements:
- Buy a new or established property valued up to $550,000.
- You must move into the property within 12 months of settlement.
- You must live in the property for at least 12 months continuously.
The discount is as follows:
Dutiable value of property
> $130,000 to $440,000
$2,870 plus 5% of amount > $130,000
$2,870 plus 6% of amount > $130,000
Discount of 1%
> $440,000 to $550,000
$18,370 plus 6% of amount > $440,000
$2,870 plus 6% of amount > $130,000
Duty reduction of $3,100
2. First Home Buyer Stamp Duty Exemption or Concession
A popular concession is the first home buyer discount. It is either a stamp duty exemption or concession depending on the value of the property you buy. You must meet the following criteria:
- All buyers be a first home buyer (i.e. neither you or your spouse owned a property as a home in Australia for 6 months continuously).
- Move into the property as your home within 12 months of settlement and live their 12 months continuously.
- If you buy a property with a dutiable value of $600,000 or less, you get the first home buyer stamp duty exemption. You pay zero stamp duty.
- If you buy a property with a dutiable value between $600,001 to $750,000.00 you get the first home buyer duty concession. This is a sliding scale concession up to $750,000.00.
- Be an Australian citizen or permanent resident.
Below we outline the sliding scale discount of the first home buyer concession and exemption.
Less than $600,000
3. Off the Plan Stamp Duty Discount
The off the plan stamp duty discount was made to encourage buyers to buy new builds from developers by giving discounted stamp duty. This discount only applies if you live in the property as your home for 12 months continuously within 12 months of settlement AND are eligible for either the permanent place of residence concession or first home buyer concession. It does not apply to investment purchases.
The discount is a little more difficult to work out as the total discount depends on when you bought the property and what type of property you are buying.
In short, how the discount works is that you pay stamp duty based on the "dutiable value" of the property (the price the State Revenue Offices uses to calculate stamp duty) rather than the "market value" (the contract price).
The dutiable value is worked out by subtracting the construction cost from the contract price of the property. Then this price is used to calculate the stamp duty payable.
For example, say that the contract price for a new off the plan apartment was $610,00.00 and you bought it before any construction was done and will live in the property as your home. The vendor advises that $455,000.00 of the contract price was construction costs, meaning the dutiable value used to work out stamp duty is $155,000.00.
This means instead of paying stamp duty of $31,670.00 based on $610,00.00 contract price, you will pay $4,120.00 stamp duty based on the $155,000.00 dutiable value if it is your home. If you are first home buyer you can get an even better discount by stacking your duty discounts and pay zero stamp duty as your dutiable value is now under $600,000.00!
As you can see by reducing the dutiable value you can gain access to discounts you may not otherwise had if you bought an established home like the permanent place or residence or first home buyer discount.
There are 2 ways to go about working out your off the plan stamp duty discount, (A) the fixed percentage method or (B) the alternative method. It is up to your Vendor to decide what method to use.
Most vendors choose to use the fixed method as it is easier to calculate and you can use the fixed method to get a rough estimate on how much stamp duty you will be paying.
A. Fixed Percentage Method
The fixed method works by applying a "fixed discount" on the dutiable value based on two things:
- What type of property you bought; and
- When you bought the property (ie. how much construction was done when you signed the contract).
What Type Of Property You Bought
The more stories your off the plan property has the bigger discount it gets! You get the full discounts noted below only if you sign the contract before any construction is done, if you sign the contract once construction starts, you get a sliding scale discount as we discuss below.
Type of Building
Freestanding or single home with or without shared walls. For example, townhouse, duplex, or flat units, including ones with touching garages.
Low rise multi lot
Homes up to three stories in height, not including basements. These are typically units, apartments, or townhouses with access to common property.
High rise multi lot
Homes with four or more stories (not including basement). These are big high rise apartments or units.
When You Bought The Property
The full discounts of 45%, 60% and 75% only apply if you signed the contract to buy an off the plan development before any construction was done.
For example if you bought a single lot dwelling for $700,000.00 before any construction was done you will work out stamp duty payable on the dutiable value of $385,000.00 instead of $700,000.00.
This is calculated as follows:
$700,000.00 (contract price) * 45% (single lot discount) = $315,000.00 (construction cost).
Then, $700,000.00 (contract price) - $315,000.00 (construction cost) = $385,000.00 (dutiable value used to calculate stamp duty).
If you signed the contract when construction started but not completed, the fixed discount is reduced by the percentage of the works done (rounded down to the lowest 10% increment).
The State Revenue Office uses the following stages of construction to determine how much construction has been completed.
Percentage The Discount Is Reduced
Slab/base foundation laid
For example, say you signed a contract to buy a multi lot low rise apartment for $700,000.00 when the slab/foundation was laid. Instead of getting a 60% reduction of the dutiable value to work out stamp duty, you take away 10% (rounding down from 15%) off this discount.
This is calculated as follows:
$700,000.00 (contract price) * 60% (fixed discount) * 90% (fixed discount reduced from when you signed contract) = $378,000.00 (construction cost).
Then, $700,000.00 (contract price) - $378,000.00 (construction cost) = $322,000.00 (dutiable value used to calculate stamp duty).
If you are looking to get an estimate on how much stamp duty you will pay with an off the plan purchase, then the fixed method is the best way to work it out.
B. Alternative Method
The alternative method requires your vendor to work out the actual construction cost for the property you are buying and then deducting the construction cost done from the contract price based on the date you signed the contract.
This is a very time consuming process and also requires your vendor to have great record keeping. As if they ever get audited by the State Revenue Office they have to provide proof on how they worked out the discount.
Because of the complexity and record keeping required, it is very rare that a vendor uses this method and the vast majority choose the fixed percentage method as all the vendor needs to note down is how much construction was done when the purchaser signed the contract.
4. Pensioner or Concession Card Holder Duty Discount - For Contracts Signed BEFORE 1 July 2023
*Note* the law has changed recently for contract signed on or after 1 July 2023 for this concession. We will update this page in due course, but for reference refer to state revenue office website here.
This is one of the lesser known concession types as it has a deceptive name. Even though it's called the "pensioner concession", in fact those who have a valid health care or concession card are usually eligible for this concession.
This concession can only be used once in your life and allows the purchaser to reduce the dutiable value of the property for contracts signed before 1 July 2023 bought as a home by $330,000.00 per valid purchaser if the contract price no more than $750,000.00.
For example, if you and your spouse who both have a valid pensioner/concession cards bought a property as a home worth $660,000.00 as joint tenants, the dutiable value to work out stamp duty is reduced to zero ($330,000.00 reduction times 2) so you pay zero stamp duty!
Remember this discount can only be used once in your life and has a few caveats as noted below.
In order to get this stamp duty discount you must meet all the following requirements:
- Hold a valid and approved concession card at settlement date (we note them below).
- Have never received the pensioner concession or exemption in Victoria before.
- Buy the property at market value and for it to be worth less than $750,000.00.
- You will live in the property as your home / your principal place of residence for 12 months continuously within 12 months of settlement.
- The home can be an established home, a home bought off the plan, house & land package, or a home that is built on vacant land within 3 years of you settling on the vacant land.
How To Work Out Contract Price & When Do You Get The Discount?
As the property needs to be worth $750,000.00 or less to get this concession, how you work out the market value depends on the type of property you buy.
For established homes the dutiable value is simply the market value contract price you bought the property for.
You can apply the pensioner discount at settlement.
Off The Plan
For off the plan purchases, the price used to work out the dutiable value for the pensioner discount is the dutiable value AFTER the off the plan discount is applied.
So if you bought a $1,000,000.00 property, but then after the off the plan discount the dutiable value becomes $600,000.00 - then you become eligible for the pensioner discount as the dutiable value is less than $750,000.00!
You can apply the pensioner discount at settlement.
Vacant Land With Home Constructed Within 3 Years Of Settlement
The dutiable value is the combined price of the vacant land and construction cost of the home.
This discount can only be applied once occupancy permit is issued for the home and you move in to live. This means you will need to apply for a stamp duty refund to get the stamp duty you paid back.
Buying A Share In The Property
The pensioner discount is $330,000.00 per person based on the value of the share of the property they are buying.
So, if you have a valid concession card, but the person you are buying the property doesn't, the pensioner discount is applied only to the portion of the share the person with the concession card is buying.
This also applies to tenants in common purchasing. For example, two pension card holder purchasers buy a property as tenants in common with a 20-80 share, then the person holding the 80% might dont get a full discount if their share is worth more than $330,000.00.
Valid Concessions Cards
The State Revenue Office lists the valid concession cards for these discounts here. They are generally:
- Services Australia Health Care Card, except the Foster Child Health Care Card (FO or FST) and Carer Allowance Health Care Card (CD) - Services Australia was formerly known as the Department of Human Services
- Department of Veterans Affairs (DVA) Health Care Card – Gold Card
- Services Australia Pensioner Concession Card
- DVA Pensioner Concession Card
- Services Australia Commonwealth Seniors Health Card
- DVA Commonwealth Seniors Health Card
- Age pension
- Special benefit
- Widow allowance
- Age pension
- Carers pension
- Disability allowance
- Disability support pension
- Family allowance
- Family payment
- JobSeeker payment
- Low income allowance
- Mobility allowance
- Partner allowance
- Parenting payment (single or partnered)
- Parenting/partner allowance
- Sickness allowance
- Wife pension
- Widow B pension
5. Young Farmer Duty Exemption or Concession
If you're a young farmer looking to purchase their first farm, you may be eligible for a stamp duty concession. You can a full stamp duty exemption if property has a value up to $600,000.00 and a sliding scale discount up to $750,000.00.
To get this concession you must meet the following requirements:
- You must be under 35 years old at the date you sign the contract to buy the property.
- The property must be both yours and your partner’s first farmland property.
- The value of the property must not exceed $750,000.
- You must be carrying on, or intending to carry on, a business of primary production in relation to the purchased property.
6. Charity or Friendly Society Stamp Duty Exemption
If you are a charity, you may be eligible for a stamp duty exemption on the purchase or transfer of a property. This is a very complicated concession as the State Revenue Office will look into detail if the transaction and entity meets the requirements to be a charity, and contains the provisions that the State Revenue Office requires to get the duty discount.
7. Primary Production and Water Entitlements Exemption
This is a niche stamp duty exemption that really only applies to primary production land that contains specific water entitlement situations. If requirements are met, no stamp duty is payable in Victoria. We're just listing this one as we're listing all stamp duty concessions available.
8. First Home Owner with Family Duty Exemption or Concession
This is a redundant stamp duty concession. As if you're eligible for this concession, you are eligible for the first home buyer concession which gives you a better discount and applies to more Victorian properties.
If you're a first home buyer with a dependent child under 18 years old, you get a full stamp duty exemption for properties worth no more than $150,000.00, and a concession for properties not worth more than $200,000.00.
As you can see this is an old concession that is redundant as the first home buyer concession is a full duty exemption up to $600,000.00 and sliding scale discount up to $750,000.00 - but this discount is still noted on the State Revenue Office's website so we have listed it in this guide.
How to Calculate your Stamp Duty Concession?
The easiest way to calculate your stamp duty concession is by using the State Revenue Office's free calculators. This is literally what our office does when determining the stamp duty our clients will pay when buying a property. The State Revenue Office has a few calculators for different scenarios, we've listed links to them below:
A. Standard stamp duty calculator
Use this calculator to work out stamp duty if you are buying a property as a home, first home buyer, or as an investment.
If you are buying an off the plan property, then you have to work out the est. dutiable value as discussed earlier in this guide, then put this amount into the calculator.
B. Pensioner / concession card stamp duty calculator
Use this calculator to work out your pensioner or concession card holder stamp duty discount.
Forget to Apply a Stamp Duty Exemption VIC?
If you forgot to apply for a stamp duty discount or exemption, you may be able to apply for a refund! We've written a guide on stamp duty refunds and how to apply for one.
Need Help with a Property Purchase?
If you're looking to buy a property in Victoria, our office offers conveyancing services. We've helped thousands of clients with their property needs, so please feel free contact us on 03 9708 5564 or by filling the form below.