Victoria Stamp Duty 2026-27: The Duty, Deposit and LVR Maths Before You Borrow
For a Victorian home buyer in 2026-27, the stamp duty (land transfer duty) on a purchase is not a flat percentage — it is a sliding scale that directly determines how much cash you need to complete, what your deposit and loan-to-value ratio (LVR) look like, and whether you will have to pay Lenders Mortgage Insurance. On a $750,000 established home in Victoria, general duty under the 2026-27 scale works out to $40,070, which can push a 20% deposit to roughly 25% of the purchase price once duty is factored in, or force a higher LVR that triggers APRA’s 3% serviceability buffer and tightens your borrowing capacity. First-home buyers who settle on a property at or below $600,000 pay zero duty, and those between $600,001 and $750,000 receive a tapered concession — meaning the duty bill and the funds-to-complete equation shift dramatically across a narrow price band. Foreign purchasers face an additional 8% surcharge on top of the standard scale, while the $10,000 First Home Owner Grant (FHOG) applies only to new homes up to $750,000. Every one of these numbers flows straight into the loan quote a licensed Arrivau mortgage adviser will prepare.
How Is Victoria’s Land Transfer Duty Calculated in 2026-27?
Victoria’s land transfer duty for 2026-27 uses a progressive scale that is unchanged from the prior year. The duty is calculated on the dutiable value of the property — usually the purchase price or market value, whichever is higher — and the rate jumps at defined thresholds.
For a standard residential purchase that does not qualify for any concession, the scale runs as follows. On the first $25,000 of dutiable value, the rate is 1.4%. Between $25,001 and $130,000, duty is $350 plus 2.4% of the amount exceeding $25,000. From $130,001 to $960,000, the calculation becomes $2,870 plus 6% of the excess over $130,000. Once the dutiable value reaches $960,001 and goes up to $2,000,000, the duty is a flat 5.5% of the total dutiable value — a structure that creates a noticeable step-up in the effective rate for properties just above $960,000. For properties above $2,000,000, duty is $110,000 plus 6.5% of the amount over $2,000,000.
There is also a concessional scale for a principal place of residence (PPR) valued at $550,000 or below, which produces a lower duty outcome than the general scale. This PPR concession is separate from the first-home buyer exemption and phases out above $550,000.
From a loan-quote perspective, the duty on a $700,000 established home under the general scale is $37,070. On a $960,000 property, the duty is $52,670. On a $1,200,000 property, the flat 5.5% rate applies, yielding $66,000. Each of these amounts must be funded at settlement, which means they sit on top of the deposit the lender requires. If you are aiming for an 80% LVR to avoid LMI, the cash you need is not simply 20% of the purchase price — it is 20% plus the full duty amount, because duty is not typically capitalised into the loan. A borrower who has saved exactly $140,000 for a $700,000 purchase (20%) will actually need $177,070 at settlement once the $37,070 duty is added, pushing the effective cash requirement to roughly 25.3% of the purchase price. That shortfall either forces LMI, a smaller purchase, or a longer savings timeline.
What Do First-Home Buyers in Victoria Pay — and Where Does the Concession Phase Out?
Victoria’s first-home buyer duty exemption and concession are among the most consequential variables in a loan sizing exercise. For contracts entered into in 2026-27, a first-home buyer purchasing a property with a dutiable value of $600,000 or less pays zero land transfer duty. This applies to both new and established homes, provided the buyer meets the eligibility criteria — principally, that they are an Australian citizen or permanent resident, have never owned residential property in Australia, and will occupy the home as their principal place of residence for at least 12 months within the first 12 months of settlement.
Between $600,001 and $750,000, the exemption phases out on a sliding scale. The concession is calculated as a reducing percentage of the duty that would otherwise be payable, so the duty bill rises progressively as the purchase price approaches $750,000. At $750,000, the concession reaches zero, and the buyer pays the full general duty.
The loan-quote impact of this phase-out is sharp. A first-home buyer purchasing at $600,000 pays $0 in duty. At $650,000, the duty under the general scale would be $34,070, and the concession reduces that figure but does not eliminate it — the exact residual depends on the phase-out formula applied by the State Revenue Office. At $750,000, the full $40,070 applies. For a borrower trying to keep LVR at or below 80%, the difference between $0 duty and $40,070 duty is the difference between needing a $120,000 deposit (20% of $600,000) and needing $190,070 in cash (20% of $750,000 plus $40,070 duty). That $70,070 swing in required cash can easily move a borrower from an LMI-free loan to one that triggers APRA’s 3% serviceability buffer on a higher assessed loan amount, which in turn can shrink the maximum borrowing capacity the lender will approve.
The $10,000 First Home Owner Grant in Victoria is available only for new homes with a dutiable value up to $750,000. It does not apply to established homes. The grant is paid after settlement and can be used to replenish savings, but it does not reduce the funds needed at settlement. In practice, a first-home buyer purchasing a new home at $700,000 may pay zero duty (if the price is at or below $600,000, or a reduced amount under the concession) and receive $10,000 after settlement, but they still need to fund the full deposit and any residual duty upfront.
How Does the 8% Foreign Purchaser Additional Duty Change the Loan Equation?
Victoria imposes an 8% foreign purchaser additional duty on top of the standard land transfer duty for residential property acquired by a foreign person. This surcharge applies to the entire dutiable value of the property and is calculated separately from the general duty scale. It is not covered by the first-home buyer exemption or concession — a foreign first-home buyer pays the standard duty (or the concessional amount, if eligible) plus the full 8% surcharge.
On a $700,000 purchase, the 8% surcharge adds $56,000 to the duty bill. Combined with the general duty of $37,070, the total duty payable reaches $93,070. That figure alone exceeds a 13% deposit on the purchase price, before a dollar of the lender-required deposit is accounted for. For a foreign buyer targeting an 80% LVR, the cash required at settlement on a $700,000 property becomes $140,000 (20% deposit) plus $93,070 (total duty), for a total of $233,070 — or roughly 33.3% of the purchase price. That is a fundamentally different loan-sizing proposition, and it pushes many foreign buyers toward lower purchase prices or higher-LVR loans that attract LMI and trigger tighter serviceability assessment under APRA’s 3% buffer.
The foreign surcharge interacts with borrowing capacity in a less obvious way too. Because the surcharge must be paid in cash at settlement and cannot be added to the loan, it depletes the funds a borrower might otherwise use to reduce the LVR. A higher LVR means the lender applies the product rate plus a 3.0 percentage-point serviceability buffer to a larger loan amount, which directly reduces the maximum loan the borrower can be approved for under APRA’s rules. For a detailed breakdown of how these surcharges work across every state and what they do to a loan quote, see Foreign Buyer Surcharges 2026-27: State by State, and What They Do to a Loan Quote.
What Is the Principal Place of Residence Concession, and Who Gets It?
Victoria’s PPR concession is a separate, narrower benefit from the first-home buyer scheme. It applies to buyers who are purchasing a home they intend to occupy as their principal place of residence, where the dutiable value is $550,000 or less. The concession uses a different, lower duty scale than the general scale, and it phases out as the value approaches $550,000.
For a property valued at $500,000, the PPR concession produces a materially lower duty bill than the general scale — the exact figure depends on the concessional rates applied by the State Revenue Office. Above $550,000, the concession does not apply, and the buyer reverts to the general scale. This concession is available to both first-home and subsequent buyers, provided the property will be their principal place of residence.
From a loan-sizing angle, the PPR concession matters most for buyers in the $400,000–$550,000 range, where the duty saving can free up several thousand dollars that can be redirected toward the deposit. That can be the difference between an LVR that crosses an LMI threshold and one that does not. For example, if a buyer at $530,000 saves $3,000–$5,000 in duty through the PPR concession, that amount can reduce the loan required by the same figure, potentially keeping the LVR below 80% and avoiding LMI altogether.
How Does Victoria’s Duty Compare with Other States for a Loan Quote?
Victoria’s duty scale sits in the middle-to-upper range among the eastern states for a typical established-home purchase, but the comparison that matters for a loan quote is not the headline rate — it is the total funds-to-complete at a given price point.
On a $700,000 established home, Victoria’s general duty of $37,070 compares with roughly $24,525 in Queensland (where the scale is lower through the middle brackets), approximately $27,265 in Western Australia, and around $25,687 in New South Wales (where the 4.5% bracket applies from $387,001 to $1,290,000). South Australia’s scale produces roughly $32,330 on the same value, and Tasmania’s yields about $26,748. These differences of up to roughly $12,500 in duty directly alter the cash a borrower must bring to settlement, and therefore the LVR and the loan amount a lender will assess.
For first-home buyers, the comparison is even starker. Victoria’s full exemption up to $600,000 is more generous than New South Wales’s $800,000 cap (which also phases out to $1,000,000), but less generous than Queensland’s uncapped exemption for new homes and vacant land, or South Australia’s uncapped exemption for new homes. A Victorian first-home buyer purchasing an established home at $700,000 pays a reduced but non-zero duty, while a Queensland first-home buyer purchasing a new home at the same price pays zero duty. That differential flows directly into the deposit math: the Victorian buyer needs more cash at settlement, all else being equal, which can constrain the loan size or force LMI.
What Happens When Duty Pushes LVR Above 80%?
Lenders mortgage insurance is triggered when the LVR exceeds 80%, and Victoria’s duty scale makes that threshold easier to cross because duty must be paid in cash and cannot be counted toward the deposit for LVR purposes. If a buyer has saved exactly 20% of the purchase price but has not separately saved for duty, the effective LVR on the loan will be higher than 80% once the duty is paid from the same pool of savings.
Consider a $800,000 purchase. The general duty is $42,070. A borrower with $160,000 in savings (20% of $800,000) who uses part of those savings to pay duty will have only $117,930 left for the deposit, resulting in a loan of $682,070 and an LVR of roughly 85.3%. That triggers LMI, which adds a one-off premium — typically capitalised into the loan — and also means the lender will assess the borrower at the product rate plus APRA’s 3.0 percentage-point buffer on a larger loan amount. The buffer alone can reduce maximum borrowing capacity by 20–30% compared with what a borrower might calculate using the actual interest rate.
The APRA debt-to-income (DTI) overlay adds another constraint. From February 2026, banks must limit new lending at a DTI ratio of 6 or above to 20% of their new residential lending flow. A borrower whose loan size is inflated by LMI capitalisation and who has a moderate income may find their DTI crosses the 6.0 threshold, making approval harder even if serviceability on the buffer test is technically met. Victoria’s duty scale, by forcing more cash out at settlement, indirectly pushes some borrowers into this DTI-constrained zone.
How Does the 2026-27 Income Tax Cut Interact with Victorian Duty?
The 2026-27 federal income tax cut — which reduces the rate on the $18,201–$45,000 bracket from 16% to 15% — modestly increases after-tax income for every Australian resident taxpayer. For a borrower earning $80,000, the tax saving is roughly $180 for the year. While that figure is small relative to a $40,000 duty bill, it does feed into the lender’s assessment of net income and therefore borrowing capacity.
More importantly, the tax cut is the first stage of a two-step reduction: the 15% rate will fall again to 14% from 1 July 2027. Lenders assess borrowing capacity on current income, but a borrower who is stretching to cover Victorian duty today can reasonably expect a slightly higher assessed capacity in the 2027-28 financial year if their income is stable. For a detailed walk-through of how the bracket change flows into a loan quote, see Australian Income Tax 2026-27: What the 15% Bracket Cut Does to Your Loan Size.
The Medicare Levy and Medicare Levy Surcharge also affect net income. The 2% Medicare Levy applies to taxable income above the low-income thresholds, and the MLS adds 1.0%–1.5% for singles earning above $101,000 without private hospital cover. A borrower at $120,000 paying the 1.0% MLS rate loses $1,200 in after-tax income annually, which reduces the net income figure a lender uses in its serviceability calculator. That can trim borrowing capacity by $15,000–$25,000 depending on the lender’s model. For the full mechanics, see Medicare Levy and MLS 2026-27: The Quiet Drag on Your Borrowing Power.
Data Basis and Sources — As at July 2026
The duty scales, thresholds, exemption caps, phase-out ranges, foreign surcharge rate, and FHOG amount in this article are sourced from the State Revenue Office Victoria and reflect the 2026-27 financial year as at July 2026. The general land transfer duty scale is unchanged from the prior year; the first-home buyer exemption and concession thresholds ($600,000 full exemption, phasing to $750,000) and the FHOG parameters ($10,000 for new homes up to $750,000) are current for contracts entered into in 2026-27. The 8% foreign purchaser additional duty is the legislated rate.
APRA’s 3% serviceability buffer is confirmed as at May 2026, and the DTI ≥6 lending flow cap has been in effect since February 2026. Federal income tax rates for 2026-27, the HELP/HECS repayment thresholds, and the Medicare Levy and MLS thresholds are sourced from the Australian Taxation Office. All figures are verified against the official sources listed in the verified facts block that underpins this article. State revenue offices remain the authoritative source for duty calculations on any specific transaction, and a licensed Arrivau mortgage adviser can model the exact funds-to-complete and borrowing capacity for an individual borrower’s circumstances.
FAQ
Does Victoria’s first-home buyer duty exemption apply to established homes?
Yes. In 2026-27, a first-home buyer in Victoria pays zero land transfer duty on a property with a dutiable value of $600,000 or less, whether the home is new or established. Between $600,001 and $750,000, a tapered concession applies, and above $750,000 the full general duty is payable. The buyer must be an Australian citizen or permanent resident, must not have previously owned residential property in Australia, and must occupy the home as their principal place of residence for at least 12 months within the first 12 months.
Can I add stamp duty to my home loan in Victoria?
Generally, no. Victorian land transfer duty must be paid in cash at settlement and is not capitalised into the loan by mainstream lenders. Some lenders may allow a limited capitalisation structure in specific circumstances, but this is uncommon and would still be subject to LVR and serviceability constraints. In practice, borrowers should budget for duty as a separate cash requirement on top of the deposit.
What is the duty on a $1,000,000 home in Victoria in 2026-27?
Under the general scale, a property with a dutiable value of $1,000,000 falls into the $960,001–$2,000,000 bracket, where duty is a flat 5.5% of the total dutiable value. That produces duty of $55,000. If the buyer is a foreign person, the 8% surcharge adds a further $80,000, bringing total duty to $135,000.
Does the $10,000 FHOG reduce the stamp duty I pay at settlement?
No. The First Home Owner Grant is paid after settlement and does not reduce the duty payable at settlement. A first-home buyer must still fund the full deposit and any applicable duty upfront. The FHOG can be used to replenish savings after settlement, but it does not change the funds-to-complete equation on settlement day.
How does the APRA buffer affect my loan if duty pushes my LVR above 80%?
When LVR exceeds 80%, lenders typically require LMI, and the loan is assessed at the product rate plus APRA’s 3.0 percentage-point serviceability buffer on the full loan amount. This higher assessment rate reduces the maximum borrowing capacity the lender will approve. Additionally, if the larger loan pushes the borrower’s DTI ratio to 6 or above, the loan may fall into the 20% flow cap that banks must observe under APRA’s February 2026 rules, making approval more constrained even if serviceability on the buffer test is met.
Where to Go From Here
Policy settings tell you the size of the cheque you need at settlement; they do not tell you whether the loan behind it actually works. If you want the duty, deposit, LMI and assessed repayment modelled together against your real income and commitments, a licensed Arrivau mortgage adviser can review your position and come back to you within one business day.
This article is general information only and does not constitute financial, tax or legal advice. Rates, thresholds and eligibility rules change. Confirm your own position with the ATO, the relevant state or territory Revenue Office, or a licensed adviser before acting.