How Much is Stamp Duty in Victoria?
Stamp duty (officially "land transfer duty") is a state tax paid when you purchase property in Victoria. The rate is approximately 5.5% of the purchase price for investment properties.
Example calculations:
- $600,000 property: ~$31,070 stamp duty
- $700,000 property: ~$37,070 stamp duty
- $800,000 property: ~$43,070 stamp duty
- $1,000,000 property: ~$55,000 stamp duty
Foreign buyer surcharge: An additional 8% on top of standard stamp duty.
- $1,000,000 property for foreign buyer: ~$55,000 + $80,000 = $135,000 total
- Plus FIRB application fees: $20,000–$40,000
This is why Melbourne property is significantly cheaper for local buyers compared to Sydney — and why we recommend local buyers take advantage of this pricing gap before it closes.
First Home Buyer Stamp Duty Concessions
Victoria offers generous stamp duty concessions for first home buyers:
Under $600,000: 100% stamp duty exemption — you pay zero stamp duty. This saves approximately $31,000 compared to an investor buying the same property.
$600,000–$750,000: Sliding scale reduction. The concession gradually decreases as the price increases toward $750,000.
Over $750,000: Full stamp duty applies — no concession available.
First Home Owner Grant (FHOG): Additional $10,000 grant for new homes valued under $750,000. This is on top of the stamp duty exemption.
Strategy tip: If your budget is $650K, consider whether a $599K property might actually cost you less after stamp duty savings. The $51K "saving" on purchase price can be offset by ~$25K in stamp duty — meaning the net difference is only $26K, but you get a property in a potentially different suburb with different growth characteristics.
Eligibility: Must be an Australian citizen or permanent resident, buying your first home, and intending to live in it for 12 months.
Stamp Duty vs Ongoing Costs — The Interstate Comparison
Many investors avoid Melbourne because of stamp duty. Here's why that's a mistake:
Sydney vs Melbourne comparison on a $1M property:
- Sydney stamp duty: ~$40,000
- Melbourne stamp duty: ~$55,000 (but on an $800K property — because $800K in Melbourne buys what $1M buys in Sydney)
- Melbourne land tax over 10 years: ~$30,000
The growth offset: If Melbourne appreciates just 3% more than Sydney annually (which historical data supports for the $600K–$800K bracket), that growth fully covers the land tax difference AND delivers superior total returns.
What $800K buys in Melbourne vs Sydney:
- Melbourne: House on 600m² land in growth corridor (Cranbourne, Hampton Park, Narre Warren) — with granny flat potential
- Sydney: Apartment with no land, or house 90+ minutes from CBD
Bottom line: stamp duty is a one-time transaction cost, and it should be weighed against the whole cost of the purchase rather than treated as a reason not to transact. We have removed a line that previously appeared here asserting a specific dollar rate of future growth — we cannot substantiate a forward growth figure for any property, and neither can anyone else.