Stamp duty — also known as transfer duty — is a state government tax on property purchases. It’s often the largest upfront cost of buying a home outside of your deposit, and the amount you pay varies significantly depending on which state or territory you’re buying in. Here’s what you need to know.
How Stamp Duty Is Calculated
Stamp duty is calculated as a percentage of your property’s purchase price or market value (whichever is higher). The rate is tiered — you pay a higher percentage on amounts above certain thresholds. As a rough guide, for a $700,000 property in NSW, stamp duty is approximately $26,000. The same property in VIC would attract around $37,000 in duty.
Stamp Duty by State
New South Wales: Stamp duty applies on a sliding scale. First home buyers pay no duty on properties up to $800,000 and a concession on properties $800,001–$1,000,000. NSW also offers an annual property tax option for first home buyers as an alternative to upfront stamp duty.
Victoria: Duty applies on a sliding scale. First home buyers pay no duty on properties up to $600,000 and a reduced rate on properties $600,001–$750,000. Foreign purchasers pay an additional foreign purchaser duty surcharge.
Queensland: Transfer duty applies on a sliding scale. First home buyers purchasing a home for $500,000 or less receive a full concession; partial concessions apply up to $550,000.
Western Australia: Duty applies on a sliding scale. First home buyers receive duty concessions on properties up to $430,000 (established homes) or $530,000 (vacant land and new homes).
South Australia: Stamp duty applies on a tiered scale. SA abolished duty for off-the-plan apartments in the CBD under certain conditions.
Australian Capital Territory: The ACT is progressively abolishing stamp duty and replacing it with higher ongoing land tax. Duty exemptions and concessions are available for owner-occupiers and first home buyers.
Can You Add Stamp Duty to Your Home Loan?
Generally, no — lenders won’t include stamp duty in your loan because it increases the LVR. You need to fund stamp duty from your savings (or from equity in another property). This is why first home buyers are advised to have their deposit plus stamp duty costs saved before purchasing.
Stamp Duty for Investment Properties
Investment property purchases don’t receive first home buyer stamp duty concessions. In most states, investors pay the full duty rate. However, stamp duty is added to the cost base of the property for CGT purposes, which reduces your capital gain when you eventually sell.
Stamp Duty on Off-the-Plan Properties
Some states offer reduced stamp duty on off-the-plan purchases because you pay duty on the contract price, which may be lower than the completed property’s value. VIC, for example, offers significant stamp duty concessions for off-the-plan purchases by owner-occupiers.
Planning Your Purchase Budget
When calculating how much you need to buy a property, always factor in stamp duty, conveyancing fees ($1,500–$3,000), building and pest inspection ($500–$800), loan application fees, and lender’s mortgage insurance (if applicable). These costs typically add 3–5% on top of the purchase price.
At Assembly Finance, we always walk clients through the full cost of purchase — including all government charges — before they begin their property search. Contact James today for a free upfront cost assessment.
