How to Avoid Stamp Duty When Buying a House in Victoria

Buying a house is an exciting and daunting experience. It can be a stressful
process, especially when it comes to understanding the different taxes and fees
associated with the purchase. One of the most common taxes is stamp duty, which
is a state-based tax that is payable when you purchase a property. In Victoria,
stamp duty is a significant cost that can add thousands of dollars to the cost
of buying a house.

In this blog post, we’ll discuss how to avoid stamp duty when buying a house in
Victoria. We’ll look at the different exemptions and concessions available, as
well as other strategies you can use to reduce the amount of stamp duty you have
to pay.

What is Stamp Duty?

Stamp duty is a state-based tax that is payable when you purchase a property. It
is calculated as a percentage of the purchase price of the property, and the
rate varies depending on the state or territory you are buying in. In Victoria,
stamp duty is calculated at a rate of 5.5% of the purchase price of the
property.

Exemptions and Concessions

The Victorian Government offers a range of exemptions and concessions that can
help you to reduce the amount of stamp duty you have to pay. These include:

• First Home Owner Grant: This is a one-off grant of up to $10,000 for eligible
first home buyers.

• First Home Vacant Land Concession: This is a one-off concession of up to
$7,000 for eligible first home buyers who are purchasing vacant land.

• First Home Buyer Duty Reduction: This is a one-off reduction of up to $8,000
for eligible first home buyers.

• Off-the-Plan Concession: This is a one-off concession of up to $7,000 for
eligible buyers who are purchasing an off-the-plan property.

• Pensioner Duty Concession: This is a one-off concession of up to $2,000 for
eligible pensioners.

• Principal Place of Residence Concession: This is a one-off concession of up to
$20,000 for eligible buyers who are purchasing a property as their principal
place of residence.

Other Strategies

In addition to the exemptions and concessions available, there are a few other
strategies you can use to reduce the amount of stamp duty you have to pay.

• Negotiate a lower purchase price: If you can negotiate a lower purchase price
for the property, you will pay less stamp duty.

• Buy a cheaper property: If you buy a cheaper property, you will pay less stamp
duty.

• Buy an older property: Older properties are generally cheaper, and so you will
pay less stamp duty.

• Buy a property in a regional area: Properties in regional areas are generally
cheaper, and so you will pay less stamp duty.

• Buy an off-the-plan property: Off-the-plan properties are generally cheaper,
and so you will pay less stamp duty.

• Buy a property with a vendor finance arrangement: Vendor finance arrangements
can help to reduce the purchase price of the property, and so you will pay less
stamp duty.

• Buy a property with a shared ownership arrangement: Shared ownership
arrangements can help to reduce the purchase price of the property, and so you
will pay less stamp duty.

• Buy a property with a family member: If you buy a property with a family
member, you may be eligible for a stamp duty concession.

Conclusion

Stamp duty can be a significant cost when buying a house in Victoria, but there
are a range of exemptions and concessions available that can help to reduce the
amount of stamp duty you have to pay. There are also a few other strategies you
can use to reduce the amount of stamp duty you have to pay.

At Ello Lending, we understand that buying a house can be a stressful process.
We are here to help you every step of the way. We can answer any questions you
have about stamp duty and help you to get the best home loan for your needs.
Contact us today to find out more.