Did you know that each state and territory across Australia have their own stamp duty rates?
Depending on your resident state, you could pay a wildly different amount of stamp duty for the same property value. You may even be exempt from paying anything at all!
With many conflicting transfer duty requirements in place across the country, you may easily become confused!
Exactly how much duty are YOU required to pay? Are you eligible for any exemptions?
Here, we explain everything you need to know about stamp duty to make the property buying process easier.
Stamp duty is also known as transfer duty and is a one-off government fee. It is a tax that you must pay the government when buying a property in Australia.
You pay a tax when the property is transferred into your name and is received by the NSW government.
Your builder, architect, council, surveyors, and other contractors are all a part of your new home construction. As such, for the approval of a construction home loan, you may be required to provide additional documentation. Further terms and conditions may also apply if you are an owner-builder.
Different rates across states
Unlike some other countries, such as the UK, Australia does not have a uniform stamp duty threshold.
Australia’s stamp duty system is much more difficult to navigate, as rates and exemptions differ from state to state.
Different rates vary by state and if the property is your primary residence, investment property, or vacant land.
When do I pay stamp duty?
As soon as you have bought property or land in NSW and completed the transaction, you must pay this duty.
You will have 3 months to pay this tax once the transaction has been finalised. Most people usually pay stamp duty at the same time they are finalising the property purchase.
If you fail to pay within 3 months, interest will start to build and add to the amount of money that you owe.
Buying off-plan in NSW does give you extra time to pay this business duty, however. As long as the unit is residential, you have 15 months after completion to pay before any interest is accrued.
You are required to pay stamp duty for the following purchases:
- Buying a residential property
- Purchasing a holiday home
- Buying an investment property
- Purchasing vacant land
- Buying commercial properties
Who is stamp duty payable to in NSW?
The state and territory governments across Australia receive the stamp duty taxes you pay.
As a resident of New South Wales, the NSW government receive your tax. You may see stamp duty also called as “business duty”.
Who do I pay stamp duty to?
Stamp duty in NSW must be paid to the Office of State Revenue of the NSW government.
This tax is added to the state or territory budget and is therefore used to fund sectors across NSW.
Who pays stamp duty?
The buyer of the property is liable to pay stamp duty, not the seller.
However, if the seller is buying their next property, they will then have to pay stamp duty. They will be the buyer of their new property and will be liable for the stamp duty payable.
Each time a homeowner moves to a different house on the property ladder, they must pay stamp duty again.
Do all home buyers pay the same stamp duty?
The amount of stamp duty paid varies depending on whether the house is your primary residence, investment, or vacant land.
Whether you are an Australian citizen, a permanent resident, or a foreign buyer, stamp duty rates will also vary.
Rates also differ if you have dependent children, foreign purchaser status, or are an investor.
Stamp Duty Rates in NSW
Stamp duty rates differ depending on your state or territory. What stamp duty rates can you expect in New South Wales?
Stamp Duty in NSW
If you live in NSW, how much is stamp duty and what will YOU have to pay?
Here are the latest requirements for stamp duty in NSW:
- Most property values in NSW fall into the $310,000 to $1,033,000 stamp duty band.
- Properties valued in this price range are required to pay $9,285 in addition to $4.50 for every $100 above $310,000.
- Homebuyers of a property valued at $750,000 in NSW will have to pay $29,055 in stamp duty fees.
However, rising property prices are meaning more expensive houses in NSW and even higher transfer duty fees. A higher current market value will mean higher stamp duty fees.
How do rising prices affect stamp duty in NSW?
The median property price in New South Wales is currently above $1,000,000, predominately driven by Sydney’s booming market. This increase means that property buyers purchasing homes above $1,033,000 in NSW fall into the higher stamp duty rate.
The higher rate requires a fee of $41,820 in addition to $5.50 per $100 over $1,033,000.
Staggeringly, property buyers purchasing a property valued at $1,200,000 in NSW must pay a stamp duty of $50,875!
How much will you have to pay when you purchase YOUR property? Use Lendstreet’s Stamp Duty Calculator to calculate stamp duty now!
Stamp Duty Exemptions in NSW
Stamp duty in NSW does offer some exemptions and discounts for eligible buyers to pay reduced stamp duty.
First Home Buyer Exemption
Here is the latest guidance for first home buyer exemptions in NSW:
- First home buyers in NSW can purchase their first home for a value up to $650,000 and pay zero stamp duty.
- If you are an NSW first property buyer, this can save you around $24,585 in standard transfer duty!
- You can purchase any type of residential property, not just a new home, vacant land, or off-plan properties.
- Newly built homes valued under $800,000 are exempt from paying.
- New homes valued between $800,000 to $1,000,000 can receive a concessional transfer duty rate.
- A concessional transfer duty rate for purchasing an existing home valued between $650,000 and $800,000 may also be available in NSW.
First Home Owner Grant
Some first home buyers may also be eligible for the First Home Owner Grant:
- You could apply for a First Home Owner Grant of $10,000 in NSW.
- This is for first time buyers who are purchasing a newly built home, vacant land, or off-plan properties.
Annual Land Tax Plans in NSW
Discussions are taking place in NSW to possibly change the stamp duty system in favour of an annual property tax.
This would involve replacing the stamp duty payment so homeowners pay a yearly tax instead.
This change would save property buyers a considerable sum when initially buying the property.
However, they would pay a lifetime annual property tax, similar to paying LMI.
How to calculate stamp duty of vacant land in NSW?
In NSW, you pay the same amount of transfer duty on vacant land that you would if you were buying property. This is for smaller plots of land.
However, for larger purchases of vacant land, a premium transfer rate is applicable.
You must pay $160,237 plus $7.00 per $100 above $3,194,000. However, the premium rate is only applicable for the first 2 hectares, with standard rates applying to the remaining land.
What is the stamp duty surcharge for foreign investors?
Buying property in NSW as a foreign investor will lead to an additional surcharge.
Foreign buyers’ duty in NSW is typically 8% of the property’s sale price.
The exception to this is for New Zealanders who have a Subclass 444 Visa.
Can you borrow stamp duty in NSW?
You cannot add transfer duty to your home loan. However, you could raise the fee from a different loan or credit card finance.
Another option is to pay transfer duty out of the deposit that you are using as a down payment for your property. However, this will mean that you have a decreased deposit and will need to borrow a higher amount on your home loan.
If your deposit reaches below 20%, you may have to pay Lenders’ Mortgage Insurance. This is an extra monthly payment to cover the lender’s interest.
How does stamp duty NSW compare across Australia?
If you live in Australia’s other states and territories, what stamp duty fees would you have to pay?
You can check the estimated amount using our stamp duty calculator, although here is a basic guide:
Calculate stamp duty now!
Discover the amount of transfer duty you will have to pay!
Use our Stamp Duty Calculator and enter the following information:
|State or Territory
||Stamp Duty Rates
|New South Wales
||$9,285 in addition to $4.50 for every $100 above $310,000.
||First home buyers are exempt from any property under $650,000.
All new homes are exempt up to a value of $800,000.
Concessions available for existing property between $650,001 to $800,000.
||$17,325 for property valued at $540,000 to $1,000,000.
Plus $4.50 for every $100 over $540,000.
|Concession for properties valued under $550,000.
||$2,870 plus 6% of the property value over $130,000.
Property valued over $960,000 is charged at 5.5%.
|First home buyer exemption for any property valued under $600,000.
Stamp duty concessions for any property valued between $600,001 and $750,000.All buyers are exempt for off-plan properties under $550,000.
||$11,115 fee for property valued between $360,001 to $725,000.
Plus $4.75 per $100 over the $360,000 mark.
|First home buyers are exempt for property valued under $430,000.
$19.19 per $100 over the $430,000 value.
||$21,330 for properties over $500,000.
Plus $5.50 for every $100 over $500,000.
|No stamp duty exemptions.
||4.95% for a property valued at $525,001 to $3,000,000.
||First home buyers are exempt on properties under $400,000.
Concessions are available for first home buyers over this amount.
SPCC $10,000 pensioners’ concession.
|Australian Capital Territory
||$11,400 for property valued between $500,001 to $750,000.
Plus $4.32 for every $100.
|No stamp duty to pay for first home buyers earning under $160,000.
Earning threshold increases with each dependent.
Concessions are available for pensioners and certain disabilities.
||$12,935 plus $4.25 for every $100 over $375,000.
||50% concession for first home buyers on homes under $400,000.
50% concession for pensioners who are downsizing.
- Property Value. Enter the value, or approximate value, of the property you want to buy.
- State or Territory. Choose from the list of states and territories in the drop-down list.
- Purpose. Do you intend to live in the property as your primary residence? Or are you purchasing the house as an investment property?
- Property Type. Are you buying an existing property or buying a new home or vacant land?
- First Home Buyer? A first home buyer may be eligible for some incentives or exemptions.
- Foreign Purchaser? Foreign purchasers are individuals who do not possess Australian citizenship or permanent residency.
Once you have entered your information, the Stamp Duty Calculator will calculate the total transfer duty payable.
Ensure the information you enter in the stamp duty calculator is correct for the most accurate transfer duty calculation!
Using a stamp duty calculator, property buying has never been so straightforward!
How much is stamp duty in NSW?
The current thresholds are:
|Value of Property
||Stamp Duty Rate
|$0 to $14,000
||$1.25 per $100
|$14,000 to $32,000
||$175 + $1.50 per $100 above $14,000 in property value
|$32,000 to $85,000
||$445 + $1.75 per $100 above $32,000 in property value
|$85,000 to $319,000
||$1,372 + $3.50 per $100 above $85,000 in property value
|$319,000 to $1,064,000
||$9,562 + $4.50 per $100 above $319,000 in property value
||$43,087 + $5.50 per $100 above $1,064,000 in property value
A premium rate of $160,237 + $7 per $100 above $3,194,000 is applicable for property over $3,194,000.
Is stamp duty based on the purchase price or value?
In NSW, the amount of duty you pay is based on either the purchase price or the current market value. Whichever figure is higher.
The highest figure is usually used, and the amount of duty you pay is calculated accordingly.
This is so that a property cannot be sold for a reduced price to friends or family to avoid paying tax.
Can I avoid paying stamp duty?
You can avoid paying the tax if you meet certain eligibility. All first home purchasers in NSW are exempt from paying the tax on homes under a value of $650,000.
Similarly, all property purchasers are exempt in NSW if purchasing a new home under a value of $800,000. This incentive by the NSW government is to encourage new property developments and suburb expansion.
You can also reduce the amount of duty you are liable to pay in NSW. You can seek a concession on existing properties between a value of $650,001 to $800,000.
Can I defer NSW stamp duty?
Buying off-plan in NSW increases the amount of time you have to pay this tax.
Usually, the duty must be paid within 3 months of transaction completion.
When purchasing a property off-plan, you have up to 15 months to pay, deferring payment for an extra 12 months.