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Stamp Duty in Victoria
In Victoria, the State Revenue Office is responsible for collecting State imposed taxes such as stamp duty. This is different from income tax, which is collected by the Commonwealth. Stamp duty in Victoria is a levy imposed on certain dutiable transactions, such as transfers of land. Unlike other jurisdictions such as NSW, Victoria no longer imposes stamp duty on transfers of shares in a company or units in a trust.
There are a number of concessions and exemptions from stamp duty in Victoria, such as the first home owner exemption and the concession for transferring residential premises. The rules dealing with all of these matters are contained in the Duties Act 2000. The State Revenue Office is the body you will deal with when a stamp duty issue arises. They have published a number of revenue rulings on their website that may assist you with understanding your stamp duty obligations.
Victoria imposes stamp duty on certain kinds of dutiable transactions. These are defined in the Duties Act 2000 and include, for example, transfers of dutiable property, surrenders of dutiable property and other transactions which result in another person receiving beneficial ownership of dutiable property (e.g. declarations of trust). Such a transaction may be made in writing (including electronically) or orally.Stamp duty is only applied in relation to certain kinds of property, known as dutiable property. This includes certain interests in land and certain kinds of leases. It also includes shares and units, but any transfers of shares or units are no longer dutiable transactions in Victoria. If you are included in a will as a beneficiary, and under that will you have an interest in any of the above kinds of property (including shares or units), that interest is also dutiable property.Similar to New South Wales, stamp duty is usually payable by the person acquiring the dutiable property. It must be paid within 30 days after the liability to pay duty arises; this period is significantly shorter than some other jurisdictions, which give you 3 months to pay stamp duty. This is important, because if you fail to pay stamp duty within the 30 day period provided, you may be required to pay a penalty or interest for late payment. The liability for duty arises when the dutiable transaction occurs. To pay the stamp duty, you will generally need to lodge the written document which gave effect to the dutiable transaction with the State Revenue Office, and possibly a separate form. Separate forms are also generally required for dutiable transactions that were made orally. The forms can be found on the State Revenue Offices’ website.The amount of duty payable on a dutiable transaction depends on the dutiable value of the property that is sold. The dutiable value of the property is equal to the greater of the amount that is paid for the property, and the market value of the property free from encumbrances. Different rates of duty then apply depending on the dutiable value. For example, if the dutiable value is greater than $960,000, the amount of duty is 5.5% of the dutiable value. The amount of duty then decreases as the dutiable value decreases. As an example, for transactions where the dutiable value is $25,000 or less, the amount of duty is 1.4% of the dutiable value.In certain circumstances, first time home owners are entitled to a 50% reduction in the amount of duty payable on a transfer of land for use as residential premises. The reduction is only available if the dutiable value of the property was $600,000 or less, and the purchaser was entitled to the first home owners grant when they purchased the property. From 1 July 2013 onwards, the first home owners grant is not available for purchases of established homes (i.e. homes that have been used already), so to be eligible for the concession you have to be buying a new or off the plan home, or you must be entering into a contract to build it.
This 50% reduction of stamp duty in Victoria is in addition to any concessional rates of duty which apply; for example, if you purchase land for use as residential premises and the dutiable value of the land is between $130,000 and $550,000, you are entitled to a concessional rate of stamp duty. If the dutiable value is less than $150,000, you are entitled to a full exemption from stamp duty.There are a number of other exemptions and concessions in the Duties Act 2000 that might be relevant to you. For example, transfers made in accordance with a will are generally free from stamp duty. Transfers between spouses are also not subject to stamp duty. Certain pensioners are also entitled to a reduction in stamp duty in Victoria for certain transfers of land.