New Taxes on Real Estate Transactions
- June 7, 2016
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Important information for clients from our conveyancing manager Angela Richards – For more information call 9583 4222 or email: firstname.lastname@example.org
When you buy real estate in Victoria you have to pay two taxes to the Government if you are the purchaser of the property.
The first of these taxes is called stamp duty and the rate of stamp duty is between 5 to 6% of the value of the property.
The second of these taxes is known as the transfer of land fee which is payable to the Victorian Land Titles Office. This article deals with the second of these taxes and also the increase to stamp duty payable by foreign purchasers.
From 1 July, 2016 – the Victorian Government have announced substantial new taxes on real estate transactions impacting both local residents and non-residents.
Current Victorian Transfer Fees – increases from 1 July 2016
Standard Real Estate Transactions – fees paid by Purchasers
Transfer of Land $92.70 plus $2.34 per $1000 of consideration (up to a consideration of $1.5m)
For example on a $1.5 million property – fee will increase to $3,602.70 (currently $1,369.00)
NB: The above fee is in addition to the stamp duty payable.
You should therefore factor this tax increase in your budgeting if you are purchasing a property.
For Foreign Purchasers of property re stamp duty
When you buy or acquire a property in Victoria you must pay what is known as a land transfer duty (otherwise known as stamp duty) unless an exemption applies.
If you are a foreign purchaser and you acquire residential property, you must pay additional duty of 3% on the dutiable value of your share of the property (prior to the application of any concessions). This is, generally, the price you pay for the property/land. This additional duty applies to contracts, transactions, agreements and arrangements entered into on or after 1 July 2015.
PLEASE NOTE: The Victorian Government announced in its 2016-2017 budget that the rate of this additional duty will increased from 3% to 7% after 1 July 2016.
For more information: http://www.sro.vic.gov.au/foreignpurchaser