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Stamp duty is a one-off government fee you will be required to pay when you buy land or property, as well as certain other assets.
It is a tax levied by Australian state and territory governments on all the legal documents, contracts and trusts involved when purchasing an asset, or have legal ownership of said asset transferred to you.
In NSW, stamp duty on property is often referred to by the Office of State Revenue as ‘transfer of land or business duty’.
Looking to calculate stamp duty? Try our stamp duty calculator.
The duty is calculated on the property’s market value. Therefore, the more expensive the property, the higher the stamp duty rate you’ll have to pay.
$0 to $14,000 = $1.25 for every $100 (the minimum is $10)
$14,000 to $31,000 = $175 plus $1.50 for every $100 over $14,000
$31,000 to $83,000 = $430 plus $1.75 for every $100 over $31,000
$83,000 to $310,000 = $1,340 plus $3.50 for every $100 over $83,000
$310,000 to $1,033,000 = $9,285 plus $4.50 for every $100 over $310,000
Over $1,033,000 = $41,820 plus $5.50 for every $100 over $1,033,000
For example, if your residential property is valued at $800,000, it would fall within the $310,000 - $1,033,000 threshold. You would incur an outright stamp duty charge of $9,285 and an additional charge of $22,050. This brings you to a total of $31,335 payable in stamp duty. Try our stamp duty calculator to determine how much you could pay.
Premium transfer duty rates for residential properties:
Over $3,101,000 = $155,560 plus $7.00 for every $100 over $3,101,000
Learn more about duty payable in New South Wales here.
In NSW, stamp duty is payable to the Office of State Revenue. There are several ways you can pay, including by mail and BPay.
Stamp duty is a tax, and therefore the money will go towards the NSW state government budget. The money is put back into the economy, and used to fund public sectors such as health, emergency services, roads and transport, and education and training.
You become liable for stamp duty when the transaction or sale is finalised, and contracts are either exchanged or completed. When purchasing property, with or without a loan, stamp duty must be paid within 3 months after the completion of the transaction. After 3 months, interest will begin to accrue, for which you will also be liable.
If you are purchasing a residential unit off the plan, stamp duty should be paid within 15 months of the contracts being exchanged or completed.
Stamp duty must be paid within 3 months of the property sale being finalised. Your solicitor or conveyancer will apply for the duties assessment and organise the payment on your behalf. This is usually done during the settlement process and they will likely inform you if you are eligible for any concessions or exemptions.
While it is recommended that you use a solicitor or conveyancer to ensure you are compliant with the law and avoid risks, you can do your own conveyancing and submit a duties assessment application. Once your total taxes and duties are determined, you can pay via BPAY, electronic funds transfer (EFT) or by mail.
First home buyers in NSW are offered concessions and exemptions on stamp duty under the First Home Buyers Assistance scheme. Between 1 August 2020 and 31 July 2021, first home buyers are exempt from stamp duty when purchasing both new homes valued up to $800,000 and existing homes valued up to $650,000. Concessions are also in place for those buying new property valued between $800,000 and $1,000,000 and existing property valued between $650,000 and $800,000.
If they are purchasing a vacant block of land on which to build a home, first home buyers will pay no stamp duty on land valued up to $400,000, and there are concessions if the land is valued between $400,000 and $500,000.
A number of conditions apply, which you must meet in order to be eligible for these concessions and exemptions. For instance, if you are purchasing property with a partner who has already benefited from the first home buyer scheme, you will not be considered eligible. You must also be a person (not a company or trust), over 18 years of age, have permanent residency in Australia (you or your partner) and occupy the dwelling within 12 months of purchasing it, for a period of at least 6 months.
Exemptions also apply if the property is being transferred due to the owner being deceased or due to the break up of a marriage or other relationship, or if ownership is being transferred between married or de facto couples.
NSW does not currently offer concessions on stamp duty to pensioners, so pensioners do need to pay stamp duty. However, pensioners may be eligible for stamp duty exemption or concessions if they are a first time home buyer.
The amount you’ll pay in stamp duty is largely based on your property’s value. Higher property prices = higher stamp duty rates. In NSW, you must pay stamp duty for vacant land as you would if you were buying a property with a dwelling.
However, if you are buying land that is over 2 hectares and is worth over $3 million, the premium transfer rate will only apply to the first 2 hectares of land you own. Any additional land will be charged at the standard duty rate for property worth over $1 million.
See the table above or use Lendi’s stamp duty calculator to find out how much you might have to pay in stamp duty.
Stamp duty is charged in thresholds. The higher a property’s value is, the more a buyer will have to pay in stamp duty. If, for example, you purchase a house worth $400,000, it’ll sit in the $310,000 to $1,033,000 value threshold. Properties in this threshold are charged $9,285 plus a rate of $4.50 for every $100 over $310,000. So, a $400,000 house would accumulate $13,335 in stamp duty charges.
Calculate your stamp duty costs here.
Most property buyers in NSW will need to pay stamp duty, but if you are a first home buyer you might be eligible for exemption or a concession. The First Home Buyer Assistance scheme in NSW offers stamp duty exemptions to buyers purchasing existing property valued under $650,000, or new property valued below $800,000. Concessional duty rates are also available for properties valued above these prices. First time buyers of empty land can also benefit from stamp duty exemptions and concessions in accordance with the land value.
Additionally, exemptions are often available when transferring a deceased person’s property, or when property transfers are happening as a result of changes in a relationship (e.g. divorce, break up or marriage).
Stamp duty is a one-off charge that must be paid within 3 months of the property settlement. If you take longer than 3 months to pay stamp duty, you may accrue interest and fees.
The primary way of gaining exemption from paying stamp duty in NSW is by applying for the First Home Buyer Assistance scheme. To apply, you must complete the First Home Buyers Assistance scheme application form and the Purchaser/Transferee Declaration form after exchanging contracts with the property’s previous owner. Your solicitor or conveyancer will assist you with lodging the application forms, along with any supporting documents needed.
Alternatively, exemption from paying stamp duty may be offered when a property is inherited by an individual through the deceased’s will, or when property transfers occur to changes in relationships (e.g. marriage, breakup, divorce).
As stamp duty is a one-off, upfront cost, lenders typically prefer when borrowers cover it through personal savings or other means.
While stamp duty cannot be added to your loan balance, it can come out of your deposit, but this may incur Lenders Mortgage Insurance (LMI) costs.
If you are eligible for a Guarantor Loan, you might be able have your stamp duty fees covered through this.
Consider having a chat with a Lendi Home Loan Specialist to get free expert advice on your home loan options.
You might have the option to defer your stamp duty payment for up to 12 months if you buy a property off-the-plan that you intend to live in.
In all other cases, you must pay it within 3 months of settlement to avoid excess fees and interest.
In addition to stamp duty, foreign buyers of property in NSW must also pay an 8% surcharge duty. If you are an Australian citizen, permanent resident, New Zealand citizen with a subclass 444 visa or a holder of a partner (provisional) visa subclass 309 or 820, you are not considered a foreign buyer and are exempt from paying the additional surcharge.
Read more about stamp duty in New South Wales here.
Looking for stamp duty information for other states: QLD, VIC, WA, SA, TAS, ACT, NT.