Stamp Duty Victoria: What Investment Property Buyers Pay in 2026

Land transfer duty — what most buyers still call stamp duty — is one of the largest upfront costs in a Victorian property purchase. For investors, it bites harder than it does for owner-occupiers, because none of the principal place of residence concessions or first home buyer exemptions apply. Understanding the exact rate schedule before you make an offer is not optional.

Victoria's General Rate Schedule for Investors

The State Revenue Office calculates duty on the greater of the contract price or the unencumbered market value. For residential investors buying established property, the standard rate scale applies in full:

The middle bracket captures most residential investment transactions. A $700,000 established apartment: $2,870 + 6% × $570,000 = $37,070. A $900,000 house: $2,870 + 6% × $770,000 = $49,070.

The $960,000 Tax Cliff

There is a structural anomaly in the Victorian system that investors must know about. At exactly $960,000, the rate does not continue to escalate marginally — it resets to a flat 5.5% applied to the entire property value.

A property at $960,000 incurs $52,670 in duty under the 6% marginal rate bracket.
A property at $960,001 incurs $52,800 under the 5.5% flat rate.

The jump is tiny at the threshold. But the effective rate change is dramatic: for a $1,000,000 purchase, the flat 5.5% on the whole amount produces $55,000 in duty — more than what the marginal rate would calculate if the bracket had continued linearly.

This cliff is particularly relevant when negotiating. Buying at $950,000 versus $970,000 has only a $680 duty difference. But buying at $958,000 versus $962,000 on either side of the $960,000 threshold is functionally the same cost, even though one figure looks much more expensive.

At $1,500,000, duty is $82,500 (5.5% flat). At $2,000,000, it's $110,000 (5.5% flat). Above $2,000,000, the 6.5% marginal rate on the excess kicks in.

The Off-the-Plan Strata Concession (Until April 2027)

The most significant duty reduction available to Victorian investors is the temporary off-the-plan stamp duty concession introduced in October 2024 and extended through to 20 April 2027 by the 2026–27 State Budget.

This concession is available to domestic residential investors, companies, and trusts — a major departure from historical off-the-plan concessions that were reserved exclusively for owner-occupiers under strict price caps.

How it works: the SRO allows you to deduct 100% of outstanding construction costs from the contract price to arrive at the "dutiable value." For a high-rise apartment contract signed before construction starts, the SRO applies a standardised construction cost percentage (typically 75% for multi-lot high-rise buildings).

Example: $700,000 apartment, pre-construction contract.

• Construction cost deduction: 75% × $700,000 = $525,000
• Dutiable value: $700,000 − $525,000 = $175,000
• Duty on $175,000: $2,870 + 6% × $45,000 = $5,570

That's a saving of $31,500 compared to buying the same completed unit for $700,000 as an established property. On a $1,000,000 off-the-plan apartment, the savings are proportionally larger.

Eligibility requirements:

• Contract must be executed between 21 October 2024 and 20 April 2027
• Property must be an apartment, unit, or townhouse within a strata subdivision that creates common property
• Standard detached house-and-land packages do not qualify
• The concession covers general duty only — the 8% Foreign Purchaser Additional Duty is still assessed on the full contract price for foreign buyers

The Foreign Purchaser Additional Duty

Foreign individuals, foreign-incorporated entities, and trusts where a foreign person holds more than 50% of capital or voting rights face an 8% Foreign Purchaser Additional Duty (FPAD) on top of standard rates. This is calculated on the full dutiable value before any concessions reduce it.

For a foreign investor at $1,000,000: standard duty of $55,000 plus FPAD of $80,000 totals $135,000 — a 13.5% upfront hurdle before the property generates a dollar of income.

SRO Ruling DA-070: Settlement Adjustment Changes (From February 2026)

A regulatory change that took effect for contracts entered into from 1 February 2026 increases the dutiable consideration in some transactions. Under SRO Draft Ruling DA-070, settlement adjustments that the purchaser pays on account of the vendor's land tax, windfall gains tax, or congestion levy liabilities are now treated as part of the dutiable value. This marginally inflates the final stamp duty bill on transactions involving those adjustments.

How to Use the SRO Stamp Duty Calculator

The official stamp duty calculator at sro.vic.gov.au handles most standard scenarios accurately. Input the purchase price, confirm that you're buying as an investor (not owner-occupier or first home buyer), and select whether the property is an established or off-the-plan purchase.

For off-the-plan calculations, you will need the percentage of construction costs from your contract or the developer's SRO certificate to determine the correct dutiable value reduction.

The Victoria Investment Property Guide includes a stamp duty forecasting worksheet covering all investor scenarios — established property, off-the-plan strata, and trust structures — alongside land tax projections for the first five years of ownership, so you can model your true upfront and holding costs before committing to a purchase.

Practical Implications for Buyers

At the $700,000 to $900,000 price range where most Melbourne investor budgets concentrate in 2026, stamp duty represents 5% to 6% of the purchase price. Combined with legal fees, building inspections, and loan establishment costs, total transaction costs typically run 6% to 8% of the property value.

That's $42,000 to $72,000 in dead money before the investment can generate a single dollar of return. It also represents capital that cannot be negative-geared, depreciated, or recovered except through sufficient capital growth on exit.

Building stamp duty into your total cash requirement — not just the deposit — is a basic discipline that surprisingly many first-time investors neglect until the conveyancer issues the settlement statement.

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