Authored by the expert who managed and guided the team behind the Australia Property Pack
Yes, the analysis of Melbourne's property market is included in our pack
If you are a foreigner thinking about buying property in Melbourne in 2026, you are probably wondering how much extra money you will need on top of the purchase price.
The short answer is that foreign buyers in Melbourne typically need to budget between 14% and 22% extra, mostly because of stamp duty, foreign buyer surcharges, and government approval fees.
We constantly update this blog post to reflect the latest taxes, fees, and regulations affecting foreign property buyers in Melbourne.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Melbourne.
Overall, how much extra should I budget on top of the purchase price in Melbourne in 2026?
How much are total buyer closing costs in Melbourne in 2026?
As of early 2026, foreign buyers purchasing residential property in Melbourne should expect total closing costs of around 14% to 18% of the purchase price, which on a 1 million AUD home means roughly 140,000 to 180,000 AUD (about 91,000 to 117,000 USD or 84,000 to 108,000 EUR).
The minimum extra budget possible when keeping expenses to the bare legal minimum in Melbourne is around 13% to 15% of the purchase price, covering only mandatory stamp duty, foreign purchaser duty, FIRB fees, title registration, and basic conveyancing.
The maximum extra budget buyers should realistically plan for in Melbourne is around 18% to 22% of the purchase price, which accounts for higher duty brackets, comprehensive building inspections, lender fees, and potential owners corporation special levies.
The main factors that determine whether your closing costs fall at the low or high end in Melbourne include your property's price bracket (higher prices mean higher duty rates), whether you need a mortgage (adding lender fees), the property type (apartments with owners corporations cost more to assess), and how thorough you want your inspections and legal checks to be.
What's the usual total % of fees and taxes over the purchase price in Melbourne?
The usual total percentage of fees and taxes over the purchase price for foreign buyers in Melbourne in 2026 is around 14% to 18%, with the bulk of this coming from Victorian stamp duty and the foreign purchaser additional duty.
The realistic low-to-high percentage range that covers most standard foreign buyer property transactions in Melbourne is 13% at the minimum up to 22% for comprehensive purchases with all optional services.
Of that total percentage, government taxes typically account for about 13% to 14% (stamp duty plus foreign duty plus FIRB fee), while professional service fees such as conveyancing, inspections, and legal checks make up the remaining 1% to 4%.
By the way, you will find much more detailed data in our property pack covering the real estate market in Melbourne.
What costs are always mandatory when buying in Melbourne in 2026?
As of early 2026, the mandatory costs when buying property in Melbourne as a foreigner include Victorian land transfer duty (stamp duty), foreign purchaser additional duty (FPAD), FIRB application fee, land title transfer registration fee, required land registry searches, and professional conveyancing or legal fees.
Optional but highly recommended costs in Melbourne include building and pest inspections (especially for houses and townhouses), strata or owners corporation document review (for apartments), independent property valuations, and specialist tax advice if your residency status is complex or you plan to rent out the property.
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What taxes do I pay when buying a property in Melbourne in 2026?
What is the property transfer tax rate in Melbourne in 2026?
As of early 2026, the property transfer tax (called land transfer duty or stamp duty) in Melbourne is progressive, with the rate reaching 5.5% for properties valued between 960,000 AUD and 2 million AUD, and 6.5% on the portion above 2 million AUD.
Yes, there are extra transfer taxes for foreigners buying property in Melbourne: the Foreign Purchaser Additional Duty (FPAD) adds 8% on top of the standard stamp duty, which means a foreign buyer purchasing a 1 million AUD property would pay roughly 55,000 AUD in standard duty plus 80,000 AUD in FPAD, totaling around 135,000 AUD (about 88,000 USD or 81,000 EUR).
Australia does not have VAT, but it has GST, and for established residential property purchases in Melbourne, buyers generally do not pay GST because existing homes are treated as "input taxed," though new residential premises may include GST in the contract price.
Stamp duty in Melbourne is paid around settlement (usually within 30 days of the contract date), your conveyancer handles the lodgment, and the amount is calculated based on the dutiable value of the property using the State Revenue Office's progressive rate tables.
Are there tax exemptions or reduced rates for first-time buyers in Melbourne?
Victoria offers first home buyer stamp duty concessions and exemptions, plus a First Home Owner Grant for eligible buyers of new homes, but foreign buyers in early 2026 typically do not qualify for these benefits due to residency requirements and the current federal ban on foreign purchases of established dwellings.
If you buy property through a company in Melbourne, you are still likely to be treated as a "foreign purchaser" if the company is foreign-controlled, meaning FPAD still applies, and company-owned properties also face different (often less favorable) land tax treatment compared to individual owner-occupiers.
There is a tax difference between new-build and resale properties in Melbourne: established homes are generally GST-free on sale, while new residential premises may have GST built into the contract price, though this is usually handled by the developer rather than added on top.
To qualify for first home buyer exemptions in Melbourne, buyers must meet eligibility criteria including Australian citizenship or permanent residency, not having previously owned property in Australia, and intending to live in the home as their principal residence for at least 12 months.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
Which professional fees will I pay as a buyer in Melbourne in 2026?
How much does a notary or conveyancing lawyer cost in Melbourne in 2026?
As of early 2026, conveyancing or property lawyer fees in Melbourne typically range from 1,200 to 3,000 AUD (about 780 to 1,950 USD or 720 to 1,800 EUR), with higher fees for complex transactions like off-the-plan purchases or properties with unusual title issues.
Conveyancing fees in Melbourne are typically charged as a flat rate rather than as a percentage of the property price, though some firms add extra for disbursements like title searches and settlement adjustments.
Translation or interpreter services for foreign buyers in Melbourne typically cost between 150 and 300 AUD per hour (about 100 to 195 USD or 90 to 180 EUR), with costs increasing for rare languages or urgent bookings requiring certified interpreters.
If you plan to rent out your Melbourne property or have a complex residency status, a one-off property tax consultation typically costs between 400 and 1,200 AUD (about 260 to 780 USD or 240 to 720 EUR), and this is highly recommended for foreign owners to avoid costly mistakes.
We have a whole part dedicated to these topics in our our real estate pack about Melbourne.
What's the typical real estate agent fee in Melbourne in 2026?
As of early 2026, the typical selling agent commission in Melbourne ranges from 1.5% to 3% of the sale price, but as a buyer you generally do not pay this fee because the seller covers the selling agent's commission in Victoria.
Buyers in Melbourne do not pay the selling agent fee; however, if you hire a buyer's agent to help you find and negotiate a property, you will pay their fee, which typically ranges from 1% to 2.5% of the purchase price or a fixed fee starting around 10,000 to 20,000 AUD (about 6,500 to 13,000 USD or 6,000 to 12,000 EUR).
The realistic low-to-high range for buyer's agent fees in Melbourne is from around 1% for basic search services to 2.5% or higher for full-service representation including off-market property sourcing, auction bidding, and negotiation.
How much do legal checks cost (title, liens, permits) in Melbourne?
Legal checks in Melbourne, including title search, planning certificates, rates and water certificates, and (for apartments) owners corporation certificates, typically cost between 300 and 1,200 AUD in total (about 195 to 780 USD or 180 to 720 EUR), depending on property type and how comprehensive your searches are.
If your lender requires a property valuation in Melbourne, the fee typically ranges from 0 to 600 AUD (about 0 to 390 USD or 0 to 360 EUR), as some lenders include the valuation in their loan package while others charge separately.
The most critical legal check that should never be skipped when buying in Melbourne is the title search, which confirms the seller actually owns the property and reveals any encumbrances, easements, or caveats that could affect your ownership rights.
Buying a property with hidden issues is something we mention in our list of risks and pitfalls people face when buying real estate in Melbourne.
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What hidden or surprise costs should I watch for in Melbourne right now?
What are the most common unexpected fees buyers discover in Melbourne?
The most common unexpected fees foreign buyers discover in Melbourne include the foreign purchaser additional duty (FPAD) on top of regular stamp duty, FIRB application fees, owners corporation special levies for apartments, ongoing land tax with absentee owner surcharges, and vacant residential land tax if the property sits empty.
Unpaid property taxes generally do not transfer to a buyer in Melbourne because your conveyancer handles the proper adjustments and certificate checks at settlement, but unpaid charges can complicate or delay the transaction if not identified early.
Buyers do get scammed with fake listings and fraudulent fee requests in Melbourne, particularly through "deposit redirection" scams where criminals send fake bank account details, so you should always verify bank details by calling a known phone number and never trust last-minute emailed changes to payment instructions.
Fees usually not disclosed upfront in Melbourne include upcoming owners corporation special levies (only visible if you read the meeting minutes and financials), higher ongoing land tax costs for absentee owners, and the true cost of the FPAD which some buyers underestimate until their conveyancer calculates the final amount.
In our property pack covering the property buying process in Melbourne, we go into details so you can avoid these pitfalls.
Are there extra fees if the property has a tenant in Melbourne?
If you buy a property with a tenant in Melbourne, you may face extra costs of a few hundred to around 1,000 AUD (about 195 to 650 USD or 180 to 600 EUR) for additional legal review of the lease terms, bond status verification, tenant notices, and settlement adjustments for prepaid rent.
When purchasing a tenanted property in Melbourne, you inherit all legal obligations under the existing lease, including honoring the lease term, maintaining the property to required standards, and following Victorian tenancy laws regarding bond, repairs, and notice periods.
Terminating an existing lease immediately after purchase is generally not possible in Melbourne unless the lease has a break clause or has expired, as Victorian tenancy laws protect tenants' rights to remain until the end of their fixed-term agreement.
A sitting tenant in Melbourne can affect the property's market value in different ways: investors may see it as a benefit because of immediate rental income, while owner-occupiers may negotiate a lower price because they must wait to move in or navigate ending the tenancy.
If you want to optimize your rental strategy, you can read our complete guide on how to buy and rent out in Melbourne.
We have made this infographic to give you a quick and clear snapshot of the property market in Australia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which fees are negotiable, and who really pays what in Melbourne?
Which closing costs are negotiable in Melbourne right now?
The closing costs that are negotiable in Melbourne include conveyancing or legal fees (you can shop around), buyer's agent fees (if you use one), lender fees (sometimes waived or reduced), and settlement timing which can affect your holding costs.
The closing costs that are fixed by law or regulation in Melbourne and cannot be negotiated include stamp duty rates set by the State Revenue Office, foreign purchaser additional duty (FPAD), FIRB application fees, and land registry fees set by Land Use Victoria.
On negotiable fees like conveyancing in Melbourne, buyers can typically save 10% to 30% by comparing multiple quotes, asking about package deals, or negotiating flat fees instead of hourly rates.
Can I ask the seller to cover some closing costs in Melbourne?
The likelihood of a seller agreeing to cover closing costs in Melbourne is generally low because the market norm is for buyers to pay their own stamp duty and transaction costs, but sellers may agree to minor concessions or repairs when negotiating price.
The closing costs sellers are most commonly willing to cover in Melbourne are not actually closing costs but rather price adjustments, repair credits, or inclusion of items like appliances and furniture, as asking sellers to pay buyer stamp duty is unusual and rarely accepted.
Sellers are more likely to accept covering some costs or offering price reductions in Melbourne during buyer's markets when properties sit longer, during winter months when competition is lower, or when the property has been on the market for an extended period.
Is price bargaining common in Melbourne in 2026?
As of early 2026, price bargaining is common and expected in Melbourne, especially for private treaty sales (non-auction properties), though the amount of negotiation depends heavily on local market conditions, property type, and how long the home has been listed.
Buyers in Melbourne typically negotiate around 2% to 5% below the asking price in private treaty sales, which on a 1 million AUD property means savings of 20,000 to 50,000 AUD (about 13,000 to 32,500 USD or 12,000 to 30,000 EUR), though auction results can vary significantly and sometimes exceed expectations.
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What monthly, quarterly or annual costs will I pay as an owner in Melbourne?
What's the realistic monthly owner budget in Melbourne right now?
A realistic monthly owner budget in Melbourne (excluding mortgage payments) ranges from around 500 to 1,000 AUD (about 325 to 650 USD or 300 to 600 EUR) for a typical property, covering council rates, utilities, insurance, and a maintenance allowance.
The main recurring expense categories that make up this monthly budget in Melbourne include council rates, water and sewerage charges, home and contents insurance, utilities (electricity and gas), and for apartments, owners corporation (strata) fees.
The realistic low-to-high range for monthly owner costs in Melbourne is around 300 to 700 AUD (about 195 to 455 USD or 180 to 420 EUR) for houses without owners corporations, rising to 500 to 1,200 AUD (about 325 to 780 USD or 300 to 720 EUR) for apartments or townhouses with strata fees.
The monthly cost that tends to vary the most in Melbourne is owners corporation fees, which can range from under 1,000 AUD per quarter for basic complexes to over 5,000 AUD per quarter for buildings with lifts, pools, gyms, or major maintenance issues.
You can see how this budget affect your gross and rental yields in Melbourne here.
What is the annual property tax amount in Melbourne in 2026?
As of early 2026, annual land tax in Melbourne for foreign owners (who are typically classified as absentee owners) can range from several thousand AUD to tens of thousands AUD depending on the taxable land value, with the absentee owner surcharge significantly increasing the bill compared to resident owners.
The realistic low-to-high range for annual land tax in Melbourne for absentee foreign owners is roughly 5,000 to 30,000 AUD or more (about 3,250 to 19,500 USD or 3,000 to 18,000 EUR) depending on whether your land value falls in lower or higher tax brackets.
Land tax in Melbourne is calculated based on the taxable value of your landholdings (not the building value), using progressive rate tables published by the State Revenue Office, with absentee owners paying higher rates than Australian residents.
The main exemption available in Melbourne is for your principal place of residence, but foreign owners who do not live in Australia generally cannot claim this exemption, meaning they pay land tax annually on their Melbourne property.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Australia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
If I rent it out, what extra taxes and fees apply in Melbourne in 2026?
What tax rate applies to rental income in Melbourne in 2026?
As of early 2026, foreign residents earning rental income in Melbourne pay Australian income tax on that income at marginal rates starting at 32.5% for the first dollar earned (no tax-free threshold for non-residents), with higher brackets reaching 37% and 45% for larger incomes.
Landlords in Melbourne can deduct legitimate rental expenses from their taxable rental income, including property management fees, council rates, insurance, repairs and maintenance, loan interest, depreciation, and advertising costs to find tenants.
The realistic effective tax rate after deductions for typical foreign landlords in Melbourne is often between 20% and 35% of gross rent, depending on how many deductions apply and whether you have loan interest expenses to offset the income.
Foreign property owners do pay a different rental income tax rate than Australian residents in Melbourne because non-residents do not receive the tax-free threshold and start paying tax from the first dollar, which means effective rates are often higher for foreign landlords.
Do I pay tax on short-term rentals in Melbourne in 2026?
As of early 2026, yes, short-term rental income (such as Airbnb) in Melbourne is taxable as ordinary income, meaning you must declare the rental earnings in your Australian tax return and pay income tax at the applicable rates.
Short-term rental income in Melbourne is generally taxed the same way as long-term rental income for income tax purposes, though the deductions you can claim may differ and GST treatment can become relevant if your short-term rental turnover exceeds the GST registration threshold.
If you want to optimize your rental strategy, you can read our complete guide on how to buy and rent out in Melbourne.
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If I sell later, what taxes and fees will I pay in Melbourne in 2026?
What's the total cost of selling as a % of price in Melbourne in 2026?
As of early 2026, the total cost of selling a residential property in Melbourne typically ranges from around 1.5% to 4% of the sale price, covering agent commission, marketing, legal fees, and any early mortgage discharge costs.
The realistic low-to-high percentage range for total selling costs in Melbourne is 1.5% at the minimum (if you negotiate low commission and minimal marketing) up to 4% or more for full-service agent packages with premium advertising campaigns.
The specific cost categories that make up the total selling expense in Melbourne include real estate agent commission (the biggest item), marketing and advertising costs, conveyancing or legal fees for the sale, and potentially early repayment fees if you discharge your mortgage before the agreed term.
The single largest contributor to selling expenses in Melbourne is almost always the real estate agent commission, which typically ranges from 1.5% to 3% of the sale price and is negotiated between the seller and their agent.
What capital gains tax applies when selling in Melbourne in 2026?
As of early 2026, capital gains tax (CGT) in Melbourne is not a separate tax but is part of income tax, meaning any capital gain you make on selling property is added to your taxable income and taxed at your marginal rate, which for foreign residents starts at 32.5%.
The main exemption to capital gains tax in Melbourne is the main residence exemption, which applies if the property was your primary home for the entire ownership period, but foreign residents generally cannot claim this exemption for properties acquired after May 2012.
Foreigners often face an additional cash-flow burden when selling in Melbourne because buyers may be required to withhold 12.5% of the sale price under the Foreign Resident Capital Gains Withholding (FRCGW) rules unless the seller provides an ATO clearance certificate proving they are an Australian resident for tax purposes.
Capital gain in Melbourne is calculated as the sale price minus the cost base (purchase price plus eligible costs like stamp duty, legal fees, and capital improvements), and Australian resident sellers who held the property for more than 12 months can apply a 50% discount, but this discount is not available to foreign residents.
We made this infographic to show you how property prices in Australia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Melbourne, we always rely on the strongest methodology we can and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source Name | Why It's Authoritative | How We Used It |
|---|---|---|
| State Revenue Office Victoria (Stamp Duty) | Victoria's official tax authority for property duties. | We pulled the exact stamp duty brackets for 2026. We then converted these into practical percentage ranges for typical Melbourne prices. |
| SRO - Foreign Purchaser Additional Duty | Official Victorian guidance on foreign buyer surcharges. | We confirmed when FPAD applies and the current 8% rate. We added this to normal duty to calculate total foreigner costs. |
| Foreign Investment Review Board (FIRB) | Federal government portal for foreign investment rules. | We verified that FIRB fees apply and are value-based. We included these as mandatory costs for foreign buyers. |
| Land Use Victoria | Victoria's official land registry fee schedule. | We anchored registration and search fees to official 2025-26 figures. We estimated realistic settlement cost ranges from these schedules. |
| Australian Taxation Office (Established Dwelling Ban) | ATO's official explanation of current foreign buyer restrictions. | We flagged the 2025-2027 ban on established home purchases. We explained how this affects foreign buyers' options in Melbourne. |
| SRO - Land Tax Current Rates | Official Victorian rate table for ongoing land tax. | We estimated annual land tax for foreign and absentee owners. We showed how the surcharge significantly increases ongoing costs. |
| Consumer Affairs Victoria (Owners Corporations) | Victoria's official consumer regulator for strata rules. | We explained what strata fees are and flagged special levy risks. We treated owners corporation costs as a major watch-out for apartment buyers. |
| ATO - Foreign Resident Income | ATO's official guidance for foreign resident taxpayers. | We grounded the rental income tax section with official rates. We explained what foreign landlords must declare and pay. |
| Cotality (CoreLogic) Housing Chart Pack | Australia's leading housing data provider with transparent metrics. | We used vendor discounting data to anchor negotiation estimates. We translated this into realistic below-asking percentages for Melbourne. |
| City of Melbourne | Local government's official explanation of council rates. | We explained how council rates scale with property value. We estimated realistic ongoing owner costs using their methodology. |
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