Stamp Duty and Land Transfer Duty in Victoria Explained

What is land transfer duty?

Land transfer duty is a Victorian state tax imposed on dutiable transactions in land. It is the modern statutory successor to the old stamp duty regime. The governing legislation is the Duties Act 2000 (Vic), administered by the State Revenue Office (SRO). Duty is most commonly triggered by the transfer of an interest in Victorian land, but the Act also captures declarations of trust over dutiable property, certain long leases at a premium, and indirect acquisitions of land through interests in companies and unit trusts ("landholder duty").

Duty is calculated on the "dutiable value" of the transaction — broadly, the greater of the consideration paid and the unencumbered market value of the property. This means that a related-party transfer at nominal or no consideration is still dutied at market value: there is no "love and affection" exemption for parents-to-children or most other family transfers outside the specific exemptions described below.

Why many people still call it stamp duty

Historically, duty was paid by physically affixing or impressing a revenue stamp onto the transfer instrument. The instrument was not legally effective to transfer title until it had been stamped. The Duties Act 2000 abolished the physical stamping mechanism. Today, duty is assessed and paid electronically through the SRO's Duties Online system and the PEXA electronic settlement platform. The transfer is "stamped" only in a notional sense, by way of an electronic duty assessment recorded against the transaction.

The name "stamp duty" has nevertheless stuck — among the public, in media, in industry, and even (informally) among lawyers and accountants. "Land transfer duty" is the technically correct term. The two are used interchangeably in this guide.

When duty is payable

For an ordinary contract of sale of land, the liability to duty arises on the date of the contract. The duty must be paid within 30 days of settlement (or, if no settlement occurs, within 30 days of the contract date for transactions that do not require settlement, such as some declarations of trust). In practice, on a standard conveyancing matter, duty is calculated and paid through PEXA as part of the settlement process — the funds are disbursed to the SRO at the moment of settlement, and the registered transfer is endorsed with the duty assessment.

For declarations of trust, transfers between trustees, landholder acquisitions and other non-conveyancing dutiable transactions, duty is assessed and paid by direct lodgement with the SRO. The 30-day window remains the general rule, with the date of the dutiable transaction determining when the clock starts.

How duty is calculated

The general duty rate is a sliding scale based on dutiable value. The marginal rates step up as dutiable value increases. For contracts entered after 1 July 2021, the top marginal rate is 6.5% for dutiable value above $2 million. The following table summarises the general rates (for transactions that are not eligible for any concession):

• $0 – $25,000: 1.4% of dutiable value.
• $25,001 – $130,000: $350 plus 2.4% of the excess over $25,000.
• $130,001 – $960,000: $2,870 plus 6% of the excess over $130,000.
• $960,001 – $2,000,000: a flat 5.5% of dutiable value.
• Over $2,000,000: $110,000 plus 6.5% of the excess over $2,000,000.

By way of illustration, duty on a $1,200,000 residential purchase (no concession) is $66,000 (5.5% of $1.2 million). Duty on a $3,000,000 purchase is $175,000 ($110,000 plus 6.5% of $1,000,000). The premium rate above $2 million is a material consideration for higher-end purchases.

Residential property

For residential property, the general rates apply unless a concession is available. The most commonly available concessions are the first home buyer exemption or concession (up to $750,000), the PPR concession (up to $550,000), the pensioner concession (up to $750,000) and (for off-the-plan strata) the off-the-plan concession. A single transaction may qualify for only one concession at a time — but the SRO's system will apply the most beneficial concession for which the purchaser is eligible.

Foreign purchaser additional duty (currently 8%) applies on top of the standard rates to a residential acquisition by a foreign person, foreign corporation or foreign trust. The surcharge is calculated on the dutiable value of the residential component of the acquisition.

Commercial property

Commercial and industrial property has historically been dutied on the same general scale as residential property. From 1 July 2024, Victoria began transitioning commercial and industrial land to an annual Commercial and Industrial Property Tax (CIPT) regime. The mechanics are deliberately staggered:

• A property that has not had a qualifying transaction on or after 1 July 2024 remains in the existing duty regime: duty is payable on each transfer at general rates.
• The first qualifying transaction after 1 July 2024 attracts duty at the existing rates. The purchaser can elect to pay the duty up-front or take a 10-year transition loan from the Treasury Corporation of Victoria, repayable in instalments with interest.
• Ten years after that first qualifying transaction, the property enters the CIPT regime: no further duty is payable on subsequent transfers, and an annual CIPT of 1% of the unimproved (site) value is payable each year in addition to existing land tax.

The CIPT regime fundamentally changes the economics of commercial property transactions and is the subject of ongoing SRO guidance. For any commercial transaction, obtain specific advice as to whether the property is in or out of the CIPT regime and the duty (and CIPT) profile of the proposed acquisition.

Vacant land

Vacant residential land is dutied on the general scale. For first home buyers, the exemption or concession can apply to vacant land where the buyer intends to construct their PPR within 12 months — practical evidence (builder's contract, occupancy permit on completion) is required.

Vacant residential land in inner and middle Melbourne may also be liable to the vacant residential land tax — a separate annual tax distinct from duty, imposed where land is unoccupied for more than six months in a calendar year.

Vacant commercial or industrial land is dutied at general rates on its first qualifying transaction, and from there follows the CIPT transition described above.

Off-the-plan concessions

The off-the-plan concession reduces the dutiable value of a qualifying off-the-plan strata purchase by the value of construction or refurbishment works performed on or after the date of the contract. Because the bulk of the purchase price for an off-the-plan apartment is usually attributable to as-yet-unbuilt construction, the concession can reduce the dutiable value (and the duty payable) very substantially.

Between 21 October 2024 and 20 October 2026, the concession is temporarily available for all off-the-plan strata purchases (apartments, units and townhouses in a registered or proposed plan of subdivision), regardless of price or whether the buyer will occupy the property as their PPR. Outside that window, the concession is restricted to PPR or first-home-buyer contracts within prescribed dutiable value thresholds.

Off-the-plan purchasers should obtain a written calculation of the expected duty saving from their lawyer or conveyancer before signing. The saving depends on the stage of construction at the contract date — earlier contracts (when little or no construction has occurred) produce the largest saving.

First Home Buyer concessions

Eligible first home buyers receive a full duty exemption for a PPR purchase up to $600,000 and a tapered concession for purchases between $600,000 and $750,000. The concession is one of the most commonly claimed in Victoria and is the most common source of unintended over-payment when not properly claimed.

Eligibility requires that:

• the buyer has never owned residential property in Australia (or, if they have, has not occupied it as a PPR);
• the buyer is a natural person aged 18 or over;
• the buyer (or one of multiple buyers) will occupy the property as their PPR for at least 12 continuous months within the first 12 months after settlement;
• the dutiable value is no more than $750,000; and
• all purchasers on title meet the criteria — taking title with a parent or sibling who is not also a first home buyer disqualifies the concession on the whole transaction.

The first home buyer concession is separate from the First Home Owner Grant (FHOG), which is a cash grant available for new builds in specified circumstances and which is administered separately.

Pensioner concessions

Holders of an eligible concession card receive a one-off duty exemption for a PPR purchase up to $330,000, and a tapered concession for purchases between $330,000 and $750,000. The concession can be claimed only once. The card must be held at the time of the contract and the property must be occupied as the pensioner's PPR for at least 12 continuous months within the first 12 months after settlement.

Where the pensioner buys jointly with a non-pensioner spouse or partner, the concession is generally available (the pensioner's interest qualifies). The concession is not transferable between partners and cannot be used twice — pensioners selling and re-purchasing should consider whether to claim the concession on the current purchase or save it for a future one.

Principal Place of Residence (PPR) concession

The PPR concession is a separate, modest concession that applies automatically to PPR purchases between $130,000 and $550,000 (where no greater concession applies). It reduces the duty by reducing the rate applicable to the band above $130,000. The concession is the default position for owner-occupier purchases below $550,000 that do not qualify as first home buyer or pensioner transactions.

Foreign purchaser additional duty

Foreign purchasers of Victorian residential property pay an additional duty surcharge on top of the standard rates. The surcharge applies to:

• foreign natural persons — broadly, individuals who are not Australian citizens, permanent residents ordinarily resident in Australia, or New Zealand citizens with a Special Category Visa who satisfy the residency test;
• foreign corporations — corporations in which a foreign person or another foreign corporation has a controlling interest; and
• trustees of foreign trusts — trusts in which a foreign person, foreign corporation or trustee of another foreign trust has a substantial interest. For discretionary trusts, the SRO's longstanding position is that the trust is foreign if any potential beneficiary is a foreign person, unless the trust deed irrevocably excludes foreign beneficiaries.

The 8% surcharge is calculated on the dutiable value of the residential component of the acquisition. On a $1,000,000 acquisition, the foreign purchaser additional duty alone is $80,000, on top of the $55,000 standard duty — a total of $135,000.

Discretionary trust deeds used to hold residential property should be reviewed and (where necessary) amended to exclude foreign beneficiaries before any acquisition. The amendment must be irrevocable and must be in place at the date of the contract — last-minute amendments after contract are too late.

Transfers between family members

There is no general duty exemption for transfers between family members. A transfer from a parent to an adult child, between siblings, or between grandparent and grandchild is treated as a dutiable transfer at market value, regardless of the consideration actually paid. This is the rule that most often surprises families attempting to "gift" a property or transfer it for nominal consideration.

Specific exemptions exist within narrow categories:

• Spouses and domestic partners: a transfer between spouses or domestic partners of their PPR (to either party alone or jointly) is exempt from duty. The exemption does not apply to investment properties.
• Family farm: intergenerational transfers of land used for primary production may be exempt where strict conditions are met, including continued primary production use and the absence of monetary consideration.
• Deceased estates: transmission applications and transfers to beneficiaries entitled under the will or intestacy are exempt (described below).

Outside these categories, intra-family transfers attract duty at market value. The market value must be supported by a current sworn valuation where the SRO requests one — attempts to "round down" the value to reduce duty are a common cause of SRO investigations and penalties.

Transfers following separation and Family Court orders

Transfers of property between separating spouses or domestic partners are exempt from duty where the transfer is made under:

• an order of the Federal Circuit and Family Court of Australia (consent orders or contested orders) under the Family Law Act 1975 (Cth); or
• a binding financial agreement made under Part VIIIA (married couples) or Part VIIIAB (de facto couples) of the Family Law Act 1975 (Cth).

The exemption applies regardless of whether the property is the PPR or an investment property, and regardless of the share transferred. It is one of the most valuable features of the formal property settlement process — an informal "handshake" agreement to transfer a jointly owned investment property to one party does not qualify for the exemption, but the same transfer authorised by consent orders does.

For practitioners, this means that property settlement negotiations should always contemplate the formalisation of the agreement by consent orders or binding financial agreement, even where the parties are otherwise on amicable terms. See our companion guide on property settlement after separation.

Deceased estates and transmission applications

Duty exemptions apply at each stage of a deceased estate real property administration:

• Transmission application: the application by the executor or administrator to be registered as proprietor on the title (replacing the deceased) attracts no duty.
• Transfer to beneficiary: the transfer from the legal personal representative to a beneficiary entitled under the will or the rules of intestacy is exempt from duty.
• Survivorship application: where the deceased held the property as joint tenant with another proprietor, the surviving joint tenant lodges a survivorship application — no duty applies.

The exemption breaks down where a beneficiary takes more than their strict entitlement under the will or intestacy. For example, where the will leaves the residuary estate equally between three children, and the children agree that one child will take the family home in exchange for cash to the other two, the additional share taken by the beneficiary who takes the home is dutiable at market value. The duty consequence can be substantial — and is often overlooked. A court-approved variation, or a deed of family arrangement structured to fall within the SRO's exempt categories, may be required.

For deeper coverage, see our guide on real property in deceased estates and the executor's guide to estate administration in Victoria.

Trusts and land transfer duty

Trust transactions are dutiable in a number of circumstances:

• Declarations of trust: a declaration of trust over dutiable property is itself a dutiable transaction, taxed on the unencumbered market value of the property.
• Transfers into trust: a transfer of property to a trustee to hold on trust is dutiable at market value. Limited exemptions exist for transfers from an apparent purchaser to the real purchaser where the apparent purchaser took the property as bare nominee — prescribed evidence is required.
• Changes of trustee: a transfer of trust property from the outgoing trustee to the incoming trustee on the appointment or retirement of a trustee may qualify for nominal duty under section 33 of the Duties Act, where the beneficial ownership does not change. Strict evidentiary requirements apply, including disclosure of the deed of appointment and any deed of variation.
• Distributions from trusts: a transfer of trust property to a beneficiary in satisfaction of the beneficiary's interest in the trust may qualify for an exemption — particularly for fixed trusts where the beneficiary has a vested interest. Distributions from discretionary trusts are generally dutied at market value.

Any trust transaction touching Victorian land warrants specific duty advice. The SRO has rulings and revenue rulings on most of the common scenarios — a quick check before structuring the transaction usually pays for itself.

Companies and landholder duty

The landholder duty regime captures indirect acquisitions of Victorian land through the acquisition of interests in private companies and unit trust schemes. The objective is to prevent the use of corporate or trust structures to avoid duty on what is, in substance, a land acquisition.

A "landholder" is a private company or unit trust scheme that holds Victorian land with an unencumbered value of $1 million or more. An "acquisition" is the acquisition of a 50% or greater interest in a private landholder company, a 20% or greater interest in a private landholder unit trust, or a 90% or greater interest in a listed landholder. Aggregation rules apply where interests are acquired by associated parties over time.

When a landholder acquisition occurs, duty is assessed on the proportional value of the underlying Victorian landholdings, at general duty rates. Foreign purchaser additional duty also applies where the acquirer is foreign and the landholdings include residential property.

Landholder duty is complex and frequently overlooked in corporate transactions — particularly in share sale agreements, capital raisings, MBOs and intra-group restructures. Any transaction involving the acquisition of shares or units in an entity with Victorian land warrants specialist duty advice. This article provides an overview only.

Common mistakes

The mistakes that arise most often in Victorian duty practice include:

• failing to claim an available concession — particularly the first home buyer exemption (sometimes worth more than $30,000) and the off-the-plan concession;
• failing to identify foreign purchaser status — particularly in discretionary trusts where the trust deed has not been amended to exclude foreign beneficiaries;
• under-declaring market value on a related-party transfer and inviting an SRO market value reassessment with penalty tax;
• treating a parent-to-child transfer as exempt because no money changes hands — there is no "love and affection" exemption;
• missing the landholder regime in a share or unit transaction where the target entity holds Victorian land;
• failing to formalise a family-law property division by consent orders or binding financial agreement, with the result that an otherwise exempt transfer attracts duty;
• failing to identify a dutiable declaration of trust (such as a written acknowledgement of trust executed after a property has been bought in another person's name); and
• missing the 30-day payment window after settlement and incurring interest and (in serious cases) penalty tax.

Late payment and penalties

Duty paid late attracts interest at the SRO's published market and premium rates, calculated from the day after the due date. Penalty tax may be imposed for defaults, ranging from 5% for an inadvertent default with voluntary disclosure, up to 75% for deliberate evasion. Penalty tax is in addition to the underlying duty, not in lieu of it.

Voluntary disclosure to the SRO before an investigation commences is the single most effective way to mitigate penalty tax. The SRO's published rulings on penalty tax mitigation are explicit: practitioners and taxpayers who promptly disclose errors are treated significantly more leniently than those who wait for the SRO to find them.

Practical examples

Example 1 — First home buyer. Aisha is a 28-year-old first home buyer purchasing a $620,000 apartment as her PPR. She will live in the apartment for at least 12 months. The first home buyer concession applies on a tapered basis. Her duty is calculated using the published first home buyer concession tables and is substantially less than the general rate of approximately $33,000 — typically only a few thousand dollars.

Example 2 — Off-the-plan. Ben and Chloe sign an off-the-plan contract in November 2024 to buy a $1,400,000 apartment. The contract is signed before construction has commenced. The construction cost component of the purchase price is $1,100,000. Under the temporary off-the-plan concession (21 October 2024 to 20 October 2026), the dutiable value is reduced by the construction component, leaving a dutiable value of $300,000. Duty on $300,000 is approximately $13,070, instead of $77,000 on the full purchase price — a saving of nearly $64,000.

Example 3 — Family transfer. Daniel and Eliza transfer their $1,500,000 investment property to their adult son. No money changes hands. The transfer is dutied at the unencumbered market value of $1,500,000. Duty is $82,500 (5.5% of $1.5 million). The "love and affection" intent is irrelevant.

Example 4 — Family Court order. Fatima and George separate. As part of consent orders, the former family home (worth $1,200,000) and an investment unit (worth $600,000) are transferred to Fatima. Both transfers are exempt under the Family Law exemption. The duty saved is approximately $66,000 + $32,070 = $98,070.

Example 5 — Foreign purchaser. Hiroshi, a non-resident, acquires a $1,800,000 Melbourne apartment. Standard duty is $99,000. Foreign purchaser additional duty is $144,000 (8% of $1.8 million). Total duty is $243,000.

Example 6 — Deceased estate variation.Iris dies leaving a $1,200,000 family home and $300,000 cash to her three children equally. The children agree that one will take the house and pay $400,000 to each sibling. The transfer to the taking child is partly exempt (the one-third entitlement, $400,000), and partly dutiable (the additional two-thirds, $800,000). Duty on $800,000 is approximately $43,070. A deed of family arrangement structured to take advantage of available SRO exemptions may reduce that figure — specific advice is warranted.

Frequently misunderstood issues

Several recurring misunderstandings cause problems for purchasers and their advisers:

• "My parents are gifting me the house — there's no duty, right?": incorrect. The gift is dutied at market value. The only common exception is a spousal PPR transfer.
• "I'm an Australian permanent resident — I'm not foreign": usually correct, but a discretionary trust controlled by the same permanent resident may still be a foreign trust unless the deed has been amended.
• "The off-the-plan concession is only for first home buyers": not at the moment. The temporary concession (21 October 2024 to 20 October 2026) is available to all off-the-plan strata purchasers, regardless of price or buyer type.
• "We sold the company that owns the property, so there's no land transfer": the landholder duty regime captures the substance of the transaction, not just the form.
• "Our family arrangement to swap the house for cash means no duty": only the strict entitlement under the will or intestacy is exempt. The additional share is dutiable unless structured within an applicable exemption.
• "The contract price is below market value, so the SRO will accept it": the SRO can and does reassess on market value, particularly for related- party transfers. Independent valuation evidence is prudent.

Property transfer costs in Victoria

Land transfer duty is the single largest transaction cost for most Victorian purchasers, but it is not the only one. A full property transfer cost budget should anticipate:

• land transfer duty (per this guide);
• foreign purchaser additional duty (if applicable);
• Land Use Victoria title registration fees (a published scale based on consideration);
• the purchaser's legal or conveyancing fees;
• search and certificate fees;
• loan establishment, lenders mortgage insurance and other lender costs;
• adjustments at settlement for rates, water and owners corporation fees;
• moving costs and insurance; and
• if applicable, an ongoing land tax liability (assessed annually on the property's site value above a threshold) and (for vacant residential land in inner and middle Melbourne) vacant residential land tax.

A good rule of thumb for purchasers is to budget 5–6% of the purchase price for all transaction costs other than the deposit and the borrowed funds — and considerably more for foreign purchasers, where the duty surcharge alone is 8%.

When to obtain legal advice

For straightforward residential purchases at general rates with a clearly applicable concession, the duty assessment is typically handled by the purchaser's conveyancer through Duties Online without issue. Legal advice is particularly important in the following scenarios:

• any acquisition by a trust (particularly a discretionary trust) or a company;
• any acquisition by a person who may be a foreign purchaser, or whose trust or company may be a foreign entity;
• any transfer between family members other than spouses transferring the PPR;
• any transfer arising out of separation or divorce — consent orders or a binding financial agreement should be in place before the transfer is registered;
• any deceased estate transfer where a beneficiary will take more than their strict entitlement;
• any share or unit purchase in an entity that holds Victorian land (landholder duty);
• any commercial or industrial property transaction, given the CIPT transition; and
• any case where an SRO assessment is disputed or an objection is contemplated.

Parke Lawyers' property and conveyancing team advises on duty assessments, concession claims, foreign purchaser issues, landholder transactions, family-law and deceased- estate transfers and SRO objections across Victoria. See our conveyancing and property services page and our commercial and business law services page, or contact Julian McIntyre directly. Related Information Centre coverage includes our guides to Section 32 vendor statements, buying property in Victoria, selling property in Victoria, buying commercial property, owners corporation disputes, easements and restrictive covenants.

Frequently Asked Questions