Victoria Stamp Duty Ruling 2026: When Vendor Tax Payments Can Affect Duty

Short summary

Victoria's State Revenue Office issued public ruling DA-070 on 20 July 2026. It explains when an amount a purchaser pays towards a vendor's tax liability forms part of the consideration used to calculate land transfer duty.

The ruling's new views on land tax and the congestion levy apply to contracts entered into on or after 17 August 2026. It is not a change to Victoria's duty rates, and the SRO says most property sales do not involve an assumed tax amount.

For an ordinary home purchase, the contract price or unencumbered value will usually remain the relevant starting point. A contract that makes the purchaser pay a vendor tax amount needs closer review.

What is an assumed tax amount?

The SRO uses the term "assumed tax amount" for an amount a purchaser must pay for or towards a vendor's tax liability under the contract of sale.

Victorian duty is charged on the dutiable value of the property. That is generally the greater of:

• the consideration for the transaction, whether monetary or non-monetary; and
• the unencumbered value of the property.

The consideration is not always limited to the price printed on the front page of the contract. DA-070 says a purchaser-paid vendor tax amount can be consideration if, looking at the transaction as a whole, the amount is part of what moves the transfer.

The label used in the contract does not settle the question. Calling an amount an "adjustment" does not automatically keep it outside the duty calculation.

Which taxes does DA-070 cover?

The ruling gives specific guidance for:

• land tax;
• windfall gains tax; and
• the congestion levy.

It also distinguishes municipal rates. The SRO does not treat the usual reimbursement of rates paid by the vendor for the period after settlement as consideration for the transfer. The reasoning is that the purchaser would become responsible for current rates attached to the land if they remained unpaid.

Late settlement interest is outside the ruling itself. The SRO has separate guidance saying late settlement or default interest can form part of dutiable value.

The land tax threshold matters

Victorian law restricts contracts that pass a vendor's land tax liability to a purchaser where the sale price is below the annually indexed threshold.

The SRO's 2026 threshold is $10.7 million. Below that amount, a contract term purporting to require the purchaser to pay the vendor's land tax is of no effect to that extent. DA-070 says an ineffective term cannot move the transfer and is not consideration.

At or above the threshold, a contract may require the purchaser to provide an amount towards the vendor's land tax. If that payment is part of what the vendor requires to transfer the land, the amount can form part of consideration and increase dutiable value.

This distinction means the ruling is more likely to matter for high-value, commercial or complex transactions than for a typical residential purchase.

Worked example

Assume a company contracts to buy Victorian land for $20 million after 17 August 2026. The contract also requires it to pay $240,000 towards the vendor's land tax at settlement.

If the $240,000 payment is part of what moves the transfer, the consideration for duty purposes may be $20.24 million rather than $20 million.

This is an illustration of the ruling, not a duty calculation or legal conclusion. The actual dutiable value can depend on the contract, valuation, ownership, transaction structure and any applicable provisions or concessions.

For comparison, an $850,000 home purchase with no purchaser-paid vendor tax amount is not changed by DA-070. The Victorian Stamp Duty Calculator can still estimate ordinary duty on the entered property value and buyer settings.

What needs to be lodged

The SRO says an assumed tax amount that forms part of consideration must be included when the duty transaction is lodged.

If the final amount is not known, its guidance says to use a reasonable estimate based on the contract method and the latest available information.

If the amount changes:

• a standard Duties Online transaction can be updated and recertified before settlement;
• a complex transaction under manual review should be updated with the SRO as soon as possible; and
• if the final amount is higher after settlement, the SRO may need to be notified within 30 days.

The SRO says interest and penalty tax may apply if a higher final amount is not reported within the required period.

What this means for the calculators

RealEstateCalc has not added an assumed-tax field to the default Victorian duty formula. That is deliberate.

Most property sales do not involve these amounts, the SRO says. Automatically adding land tax or another vendor liability would overstate ordinary buying costs.

The current tools estimate common scenarios:

• Victorian Stamp Duty Calculator: ordinary duty brackets, selected concessions and foreign purchaser surcharge;
• Property Purchase Cost Calculator: a broader upfront-cost budget; and
• Victorian Land Tax Calculator: an indicative annual land tax estimate for land holdings.

They do not read a contract, identify an assumed tax amount or decide whether a payment forms part of consideration. A conveyancer, solicitor, tax adviser or the SRO should check a transaction-specific question.

What remains uncertain

• DA-070 is a Commissioner's public ruling, not a new duty rate.
• The land tax and congestion levy views apply to contracts from 17 August 2026, which had not started when this article was published.
• The ruling says it is a guide and is not exhaustive.
• SRO rulings do not have the force of law. The SRO makes each decision on the facts and law applying to the particular case.
• Contract wording, sale value and the nature of the payment can change the outcome.

Sources

• State Revenue Office Victoria: Land transfer duty - Assumed tax amounts, ruling DA-070, issued 20 July 2026, effective 17 August 2026. Checked 25 July 2026.
• State Revenue Office Victoria: Changes to assumed tax amounts in duty transactions, updated 20 July 2026. Checked 25 July 2026.
• State Revenue Office Victoria: Changes in ownership, including the 2026 land tax adjustment threshold. Checked 25 July 2026.
• State Revenue Office Victoria: Duty payable on late settlement and default interest. Checked 25 July 2026.

General information only. This article is not legal or tax advice and cannot determine the dutiable value of a transaction. Check the contract and current SRO guidance with a qualified professional before relying on an estimate.