Dutiable Value Decoded: How Off-the-Plan Stamp Duty Is Actually Calculated in VIC

Understanding what the dutiable value is and how it affects purchases is a pivotal aspect of buying off-the-plan. This important term is how many buyers save thousands on stamp duty, so let’s explore the concept in detail, so you can also start taking advantage of this huge saving! Firstly, let’s start by understanding the fundamentals. What is the dutiable value? Simply, it’s the contract price minus construction costs at the time of signing the contract. Many buyers pay stamp duty on the dutiable value, not the contract price, which is what makes buying OTP so appealing. While the standard off-the-plan (OTP) concession typically applies to principal place of residency (PPR) buyers, including first-home buyers, Victoria’s temporary OTP stamp duty concession extends to all purchasers, including investors and foreign buyers, until 20 Oct 2026.

Key Definitions

• Dutiable value: is the value of the property at the time of signing. This is calculated by combining the land value (25% of the contract price) with whatever construction % the project has reached. 

Quick example:

• Contract price: $800,000
• Estimated cost of construction at the time of signing: $300,000
• Dutiable value = $800,000 − $300,000 = $500,000
  Stamp duty is then calculated on $500,000, not the full $800,000.
  (General info only—buyers should check the current SRO Victoria rules or get advice for their situation.)
• Off-the-plan concession: A calculation method that can reduce the dutiable value. It is not a separate grant or rebate.
• PPR vs Investor: PPR buyers must move in within 12 months and live there for 12 months to get duty concessions. Investors don’t qualify for PPR-based duty concession

Who’s Eligible (and Who Isn’t)

• Generally eligible: Under Victoria’s temporary off-the-plan concession, available until 20 October 2026, all purchasers qualify (individuals, investors, companies and trusts) 
• [2] Edge cases: changing the named buyer before settlement, transferring the contract to someone else, deciding to rent instead of living in the home or buying with a co-purchaser where only one plans to move in. These events can change who qualifies for concessions and may trigger extra duty under the sub-sale rules, so speak with your conveyancer before you proceed.
• Evidence SRO may seek: Intention to occupy, timeframe for moving in, supporting documents.

The Core Formula

Dutiable value = Contract price − Construction or refurbishment costs not yet incurred at the contract date.
In a nutshell, you usually pay duty on the land plus what is already built when you sign. Timing matters. The contract date governs the deduction, not the bank valuation at settlement.

Step-by-Step: How It’s Calculated

1.  Start with the contract price.
2.  Get the figures from the right source. Speak to your conveyancer or request the figure from the developer. 
3.  Let your adviser do the calculation. Your conveyancer can use those figures to work out the dutiable value and   confirm the stamp duty position for you.
4.  Apply the current VIC duty rates to that dutiable value
5.  Layer any first-home buyer exemptions or concessions if eligible.
6.  Confirm PPR occupancy requirements to retain the concession.

Worked Examples*

Example A — PPR buyer

1. Contract price: $700,000
2. Un-incurred construction at contract date: $350,000
3. Dutiable value: $700,000 − $350,000 = $350,000
4. Apply VIC duty to $350,000 → duty ≈ $13,870. If the buyer waited until the project was completed, they would pay $37,070.
5. If FHB PPR, an exemption or concession may reduce duty further.

Example B — Timing advantage in a high-rise

1. Same apartment, $700,000
2. Early stage: un-incurred $420,000 → dutiable value $280,000 (approximate stamp duty only $10,370)
3. Late stage: un-incurred $120,000 → dutiable value $580,000 (approximate stamp duty $29,807).
4. Takeaway: The earlier you sign the contract, will often result in the lower stamp duty payment for eligible buyers.

Common Traps and How to Avoid Them

1. Assuming all OTP buyers get the concession.
2. Using settlement valuation instead of the contract date.
3. Nominating a new purchaser without advice. It can alter eligibility.
4. Changing intention to rent before moving in. This can jeopardise PPR benefits.
5. Missing FPAD until assessment.
6. Applying out-of-date duty scales. Always check SRO VIC.
7. Waiting until a later stage of construction, as this can significantly alter the stamp duty amount payable. 

First-Home Buyers: How Stamp Duty and Government Grants Stack

FHB stamp duty exemptions and concessions apply to the dutiable value, not always the contract price. Under the current thresholds, many FHB PPR buyers pay little to no stamp duty once the OTP deduction is applied, depending on the property price. To apply for these concessions and exemptions, your conveyancer or solicitor usually claims these at settlement. In order to ensure a smooth process, have your identification, residence intention and contract paperwork ready.

Timeline: From Expression of Interest to Keys

1. Expression of Interest to contract: Review the contract with your conveyancer and reserve the apartment. The contract date sets the off-the-plan calculation, as the duty is based on land plus works completed on that day. 
2. Finance and valuation: After signing, progress your loan. The lender will value near completion for lending purposes. This valuation does not set stamp duty.
3. Pre-settlement inspection: Close to completion, inspect the apartment against plans and inclusions. 
4. Settlement and duty: Your conveyancer settles through PEXA. Stamp duty is paid using the dutiable value tied to the contract date and any concessions. Ensure insurance starts at settlement.
5. Move-in and compliance: If you claimed PPR, move in within 12 months of settlement and live there for 12 months straight. Keep documents that show occupancy. If plans change, speak to your conveyancer promptly.

Quick FAQ

• Do investors get the OTP concession? Usually no. However, Victoria’s temporary off-the-plan concession currently applies to all buyers, including investors and foreign purchasers, until 20 October 2026.
• Is duty based on my settlement valuation? No. The contract date drives the deduction.
• Can the dutiable value be $0? No, the lowest amount the dutiable value could be is 25% of the contract price (which is the pre-construction value).
• What if I rent it out later? To qualify for the PPR benefits, you must reside in the property for a minimum of 12 months. 
• Do furniture or upgrade packs change the dutiable value? Generally not, only building works count in most cases. However, it’s best to confirm with your conveyancer.
• One joint buyer is foreign. What happens? FPAD may apply to that interest.

Thinking about an OTP purchase in Melbourne? Our team can help you estimate the dutiable value for Beach Point Sandringham, Sanctuary Sandringham, Riverbend Ivanhoe and Park View Burwood.

References:
[https://www.sro.vic.gov.au/buying-property/land-transfer-stamp-duty/plan-duty-concession

[2] https://www.sro.vic.gov.au/buying-property/land-transfer-stamp-duty/sub-sales-and-duty?utm_source

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