When looking to purchase real estate in Victoria, it is important to consider the financial implications of property investment. In addition to the price of the property, there are other less obvious costs involved in buying a house or other type of dwelling. In this blog, we’ll examine Victoria’s property taxes, such as land transfer duty, and how to prepare for these expenses.
Property Taxes in Victoria
- Land Tax:
In Victoria, a land tax will apply if your new property has a taxable land value exceeding a certain threshold. The rate at which you’re charged for land tax will depend upon your land’s taxable value. - Vacant Residential Land Tax:
This property tax was introduced to help address housing affordability issues in Victoria. Property owners need to ensure that their vacant land complies with terms and conditions outlined in the legislation to avoid vacant residential land tax. - Land Transfer Duty:
Land transfer duty, otherwise known as stamp duty, is a one-time tax imposed on the transfer of property ownership.
What is land transfer duty?
Land transfer duty is a tax imposed by the state government on property purchases. In Victoria, land transfer duty is calculated based on the purchase price of your property. You may be eligible for a concession or exemption on land transfer duty if you are a first-time homebuyer or purchasing a property off-the-plan. Eligibility criteria, including property value limits and residency requirements, should be carefully reviewed. If your new property is your primary residence, you may consider applying for a principal place of residence concession (PPR). Certain criteria must be met, such as intending to live in the property within 12 months of settlement.
How much does land transfer duty cost?
The Victorian government has created an online estimator for those wishing to get an idea of how much land transfer duty they can expect to pay. Remember to look into any concessions you may be eligible for, as these can greatly reduce the financial burden of purchasing a new property. It is best to seek expert advice if you’re feeling unsure about anything regarding your property ownership journey.
Understanding the financial implications of Victoria’s property taxes and land transfer duty will empower you in your property purchasing journey. If you need expert advice, contact our friendly team on 1300 1BORRO.
