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Property taxes and fees in Melbourne can add up to $60,000-$80,000 to your purchase costs, depending on your buyer profile and property price. Understanding these costs upfront helps you budget accurately and avoid surprises at settlement.
Melbourne property buyers face multiple layers of taxes and fees, from Victorian stamp duty (the largest cost) to ongoing council rates and land tax. Foreign purchasers pay an additional 8% surcharge, while first-home buyers receive significant concessions on properties under $750,000.
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Victorian stamp duty ranges from $11,356 for a $650,000 first-home purchase to $40,070 for a $750,000 property, plus 8% foreign buyer surcharge if applicable.
Total upfront costs including fees typically add 6-12% to your purchase price, with ongoing annual charges of $2,000-$4,000 for rates, levies and body corporate fees.
| Cost Category | Typical Range (AUD) | When It Applies |
|---|---|---|
| Victorian Stamp Duty | $11,356 - $40,070+ | All purchases (concessions available) |
| Foreign Purchaser Surcharge | 8% of property value | Foreign buyers only |
| Registry & Settlement Fees | $3,800 - $4,000 | All purchases |
| Legal & Inspection Costs | $2,000 - $3,500 | All purchases |
| Lenders Mortgage Insurance | $10,000 - $16,000+ | If borrowing >80% LVR |
| Annual Council Rates | $1,200 - $2,500 | All property owners |
| Annual Land Tax | $975+ (if applicable) | Investment properties/high values |
What details do I need to calculate my exact property costs in Melbourne?
You need four key pieces of information to calculate precise property taxes and fees in Melbourne.
First, provide the exact contract price in Australian dollars and specify the property type - whether it's a house, townhouse, or apartment. You must also indicate if the property is new construction, established (existing), or purchased off-the-plan, as this affects various concessions and charges.
Second, clarify your intended use and buyer status. State whether you'll live in the property as your primary residence or rent it out as an investment. Your buyer classification matters significantly - are you a first-home buyer, an Australian citizen or permanent resident, or a foreign purchaser? Each category has different tax rates and available concessions.
These details directly impact your stamp duty calculation, foreign purchaser surcharges, first-home buyer concessions, and ongoing land tax obligations. Without this information, you can only work with estimates based on typical scenarios rather than your actual tax liability.
How do I determine if I qualify as a first-home buyer or foreign purchaser in Victoria?
Victorian first-home buyer status requires you to have never owned property anywhere in Australia and intend to occupy the property as your principal place of residence within 12 months.
You qualify as a first-home buyer if you're purchasing alone and have never held a beneficial interest in residential property in Australia. For couples or joint purchasers, all parties must meet this requirement. The property must be your intended principal place of residence, and you must move in within 12 months of settlement.
Foreign purchaser classification applies if you're not an Australian citizen or permanent resident at the time of contract. This includes temporary visa holders, New Zealand citizens without permanent residency, and overseas buyers. The 8% foreign purchaser duty surcharge applies regardless of your residency intentions or how long you've lived in Australia.
Companies and trusts face different rules, with most considered foreign purchasers unless they meet specific Australian ownership thresholds. If your status changes between contract and settlement (such as gaining permanent residency), you may need to apply for duty adjustments through the State Revenue Office.
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What is the Victorian stamp duty for my property price and buyer type?
Victorian stamp duty varies dramatically based on property price and buyer classification, ranging from zero to over $40,000 for typical Melbourne purchases.
| Property Price (AUD) | Standard Buyer Duty | First-Home Buyer Duty |
|---|---|---|
| $600,000 | $31,070 | $8,200 (concession applied) |
| $650,000 | $33,820 | $11,356 (concession applied) |
| $700,000 | $36,570 | $24,713 (concession applied) |
| $725,000 | $38,195 | $32,141 (concession applied) |
| $750,000 | $40,070 | $40,070 (no concession) |
| $800,000 | $42,820 | $42,820 (no concession) |
| $900,000 | $48,320 | $48,320 (no concession) |
Which concessions can reduce my Victorian stamp duty, and by how much?
Several concessions can significantly reduce your Victorian stamp duty, with first-home buyer benefits providing the largest savings.
First-home buyer concessions offer substantial duty reductions on properties under $750,000. For a $650,000 purchase, you save $22,464 in duty (paying $11,356 instead of $33,820). The concession gradually phases out between $600,000 and $750,000, with no benefits available above $750,000.
Off-the-plan concessions reduce the dutiable value by up to $25,000 for new properties purchased before construction completion. This translates to duty savings of approximately $1,375 for most buyers. Principal place of residence concessions may apply for certain property types and circumstances.
Pensioner concessions provide duty exemptions or reductions for eligible seniors purchasing their principal place of residence. The exact benefit depends on your pension type, property value, and intended use. These concessions can stack with first-home buyer benefits if you meet all eligibility criteria.
How much extra do foreign purchasers pay in stamp duty and surcharges?
Foreign purchasers pay an additional 8% of the property value as a surcharge on top of standard Victorian stamp duty, significantly increasing purchase costs.
For a $750,000 Melbourne property, foreign buyers pay the standard stamp duty of $40,070 plus an additional foreign purchaser duty of $60,000, totaling $100,070 in stamp duty charges. This represents a 150% increase compared to Australian citizens or permanent residents.
The 8% foreign purchaser surcharge applies to the full dutiable value regardless of property type or intended use. Unlike standard stamp duty, no concessions or reductions are available for foreign purchaser duty. The surcharge applies even if you're temporarily in Australia on a visa or have been living here for years without permanent residency.
Foreign purchasers also face additional ongoing charges, including a 2% absentee owner surcharge for land tax calculations if the property is not their principal place of residence. This can add thousands in annual tax obligations beyond the upfront purchase costs.
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What are the exact Land Registry fees I'll pay at settlement?
Victorian Land Registry fees include transfer registration and mortgage registration charges, totaling approximately $3,710-$3,850 for most Melbourne property purchases as of September 2025.
The transfer registration fee is $3,600 for electronic settlements, which covers registering your ownership with Land Registry Services Victoria. This fee applies to all property transfers regardless of price or buyer type. Paper-based settlements incur higher fees, but electronic processing is standard practice for most transactions.
Mortgage registration fees cost approximately $110 for electronic registration if you're borrowing money to purchase the property. This registers your lender's security interest over the property. The PEXA electronic settlement platform charges an additional $120-$140 for processing the electronic settlement.
Additional registry searches and certificates may be required during the conveyancing process, typically costing $50-$200 in total. These include title searches, plan searches, and other due diligence requirements that your solicitor or conveyancer will arrange.
What lender costs and insurance premiums should I budget for?
Lender costs typically range from $800-$1,200 for application and valuation fees, with Lenders Mortgage Insurance adding $10,000-$16,000+ if you borrow more than 80% of the property value.
Standard lender fees include application processing ($200-$600), professional property valuation ($300-$600), and settlement fees ($150-$400). These costs are relatively consistent across major Australian lenders, though some offer fee waivers as part of promotional packages.
Lenders Mortgage Insurance (LMI) represents the largest potential cost if you have less than a 20% deposit. For a 90% loan-to-value ratio on a $600,000 property, LMI premiums range from $10,000-$16,000 depending on your lender and loan amount. Higher LVR ratios (above 90%) or lower deposits increase premiums significantly.
LMI is a one-time cost that can be paid upfront or added to your loan amount. The premium varies based on loan amount, LVR, property type, and your employment status. First-home buyers may access reduced LMI rates through certain government-backed schemes.
How much will legal fees and property inspections cost me?
Conveyancing and legal costs range from $1,000-$2,500 including searches and disbursements, while building, pest, and strata inspections add another $900-$1,500 to your purchase expenses.
1. **Conveyancer or solicitor fees**: $800-$1,800 for standard residential purchases2. **Legal searches and certificates**: $200-$400 for title searches, planning certificates, and other due diligence3. **Disbursements and administration**: $100-$300 for document preparation and lodgment fees4. **Building inspection**: $400-$800 for structural and safety assessment5. **Pest inspection**: $250-$350 for termite and pest evaluation6. **Strata inspection (apartments/townhouses)**: $250-$350 for body corporate financial reviewIt's something we develop in our Australia property pack.
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What are the annual council rates for Melbourne properties?
Melbourne council rates average $1,200-$2,500 annually for residential properties, with the exact amount determined by your local council and property value as of September 2025.
Council rates are calculated using your property's Capital Improved Value (CIV) multiplied by a rate in the dollar set by your local council. Melbourne's 31 local government areas each set their own rates, with inner-city councils typically charging higher amounts due to increased service costs and property values.
The Victorian government caps annual rate increases at 3% for 2025, limiting how much councils can raise your rates each year. However, property revaluations can still result in significant changes to your individual rate bill if your property value has increased faster than the council average.
Your rates notice will show both general rates (for council services) and any special charges for specific services like waste collection or street lighting. Most councils offer quarterly payment options, with small discounts available for annual payments in advance.
How much is the Fire Services Property Levy on my Melbourne property?
The Fire Services Property Levy consists of a fixed charge of $100-$150 plus a variable component based on your property value, typically totaling $200-$500 annually.
The fixed component applies to all properties and covers basic fire prevention services. The variable component is calculated as a percentage of your property's Capital Improved Value, similar to council rates. Higher-value properties pay proportionally more for the variable component.
This levy appears as a separate line item on your council rates notice and funds Victoria's fire prevention and emergency services. The levy is collected by councils but administered by the Emergency Services Levy Monitor, ensuring consistent application across all Victorian municipalities.
Investment properties and non-resident owners pay the same Fire Services Property Levy rates as owner-occupiers, with no additional surcharges or discounts based on occupancy status.
What annual land tax will I pay based on my property and ownership profile?
Victorian land tax applies to investment properties and high-value holdings above $300,000 in unimproved land value, with rates starting at $975 annually and increasing based on total landholdings.
Principal place of residence properties are exempt from land tax, meaning owner-occupiers typically pay no land tax regardless of property value. Investment property owners and those with multiple properties face land tax on the combined unimproved value of all their Victorian landholdings above the $300,000 threshold.
The tax rate is progressive, starting at 0.2% for land values between $300,000-$399,999, rising to higher percentages for more valuable holdings. For a single investment property worth $600,000 in land value, the annual land tax is approximately $975.
Foreign owners and absentee landlords pay an additional 2% surcharge on top of standard land tax rates. Trust ownership may also trigger additional surcharges depending on the trust structure and beneficiaries. These surcharges can double or triple your annual land tax liability.
What other ongoing and one-time charges should I budget for?
Additional property costs include body corporate fees, utility connections, and various council charges that can add $2,000-$6,000 annually to your ownership expenses.
1. **Owners corporation fees (apartments/townhouses)**: $1,000-$5,000 annually for building maintenance and management2. **Water and sewerage service charges**: $600-$900 per year for connection and usage3. **Waste collection charges**: $200-$400 annually, often included in council rates4. **Settlement adjustments**: $200-$700 for pro-rated rates and water charges at settlement5. **Vacant residential property tax**: Up to $4,000 annually if property remains vacant (applies to specific inner Melbourne areas)Short-stay accommodation levy applies to properties used for Airbnb or similar services in certain Melbourne council areas, typically costing $100-$400 per year. Some councils also charge additional fees for short-stay accommodation permits and compliance monitoring.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Property taxes and fees represent a significant portion of your Melbourne real estate investment, often adding 6-12% to your purchase price depending on your buyer profile and financing arrangements.
Foreign purchasers face the highest costs with 8% surcharges and ongoing land tax penalties, while first-home buyers benefit from substantial concessions on properties under $750,000.
Sources
- Money.com.au Stamp Duty Calculator
- Compare the Market Victoria Stamp Duty Calculator
- Essential Services Commission Victoria Rate Caps
- Lead Conveyancing Registration Fees Guide
- Casa Conveyancing Registration Fees
- Victorian Local Government Rate Calculation
- State Revenue Office Victoria Calculators
- Commonwealth Bank Stamp Duty Calculator