Sarah: What is transfer duty, and exactly how much will you have to pay if you're purchasinga property in Victoria?If you want great home loan tips in Australia, please subscribe to our channel, and don'tforget to hit the bell to be notified when we upload new videos.Sarah: What is transfer duty?Transfer duty is a one-off government fee that you'll be required to pay if you buyland or property in Victoria.In Victoria, transfer duty is imposed following the transfer of a title, whether that be forcommercial, residential or investment purposes.Sarah: How is transfer duty calculated in Victoria?The number of exemptions or concessions available depend on who you are and the type of propertyor land that you are purchasing.And by who you are, we mean are you a first home buyer, a concession card holder, a pensioner,a foreign investor, or just a standard owner occupier.If you're in a rush, you can use our free calculator tool to see exactly how much youmight need to pay using the link.Sarah: How is standard transfer duty calculated?If you're not a first time buyer nor a concession card holder or a pensioner, and the propertythat you're purchasing is over $550,000, unfortunately there are no exemptions or concessions availablein Victoria.Sarah: Transfer duty will be calculated as follows.For properties valued between $25,000 and $130,000, you'll pay $350, plus an additional2.4% of the dutiable value that exceeds $25,000.So roughly between $350 and $2500For property value between $130 and $600,000, you'll pay $2,870, plus an additional 6% ofthe dutiable value that exceeds $130,000.Again, roughly $2,870 up to $28,200.For properties valued $960,000 upwards and over, you'll pay 5.5% ofthe dutiable value.Sarah: Now let's talk about the exceptions or concessions that might be available forcertain people.If you're a first home buyer purchasing a property up to $600,000, you'll be exemptfrom paying any transfer duty.If you're purchasing a property over $600,000 you will be eligible for transfer duty concessionsthat are calculated on a sliding scale.This is similar to how standard transfer duty is calculated.Sarah: The second group, owner occupier.There are also concessions available for all homeowners whose property value does not exceed$550,000, and they reside in the property for at least a minimum of 12 months.The concession is called the principal place of residence, or PPR, and once again it'scalculated on a sliding scale.If you're also a first home buyer, you must choose which concession you wish to receive.You cannot receive both simultaneously.Depending on the value of the property, one may afford you a better discount than theother.Sarah: Group three, concession card holders and pensioners.Finally, concession card holders and pensioners may be exempt from paying transfer duty onpurchases up to $330,000.They also might receive a concession if the property is valued less than $750,000.This incorporates the PPR concession and the property must be a primary place of residencefor at least 12 months.Sarah: Now let's talk about when you might need to pay additional transfer duty, whichmainly applies to foreign purchasers.In 2016, Victoria began imposing an additional 7% duty rate on foreign purchasers who buyresidential property.So when is transfer duty payable in Victoria?You become liable to pay the land transfer duty when the transaction or sale is finalisedand the contracts are exchanged or complete.If you do not pay the duty within 30 days, penalties and interest may start to accrue.Sarah: That's it, guys.If you found this video helpful, please give us a thumbs up, and if you have any questions,leave them in the comment section below.Finally, make sure to check out our channel for other videos and tips.See you next time.
