Stamp duty is one cost that catches people off guard when buying property in Australia. It’s a significant expense that needs to be factored into the budget early on. But what exactly is stamp duty, and how does it affect your property purchase? In this guide, we’ll answer some of the common questions around stamp duty, to make it easier for you to understand and to plan for this expense.
What is stamp duty?
Stamp duty is a tax you pay on certain transactions, including property purchases, motor vehicle registrations, and some insurance policies. When it comes to real estate, stamp duty is charged based on the market value or the purchase price of the property — whichever is greater. So the more expensive the property, the higher the stamp duty.
Who pays stamp duty?
In real estate transactions, the buyer is responsible for paying stamp duty. This is something you'll need to account for when planning your finances and securing a home loan.
How much does it cost?
Stamp duty varies depending on where you live. Each state and territory in Australia sets its own rates, and the approach to calculating stamp duty differs across the country. Some states offer stamp duty concessions to first home buyers or on land purchases, which can lower the amount you need to pay. To find out exactly how much stamp duty you’ll owe, use an online stamp duty calculator specific to your state or territory:
- Calculate stamp duty in New South Wales here.
- Calculate stamp duty in NT here.
- Calculate stamp duty in South Australia here.
- Calculate stamp duty in Western Australia here.
- Calculate stamp duty in Queensland here.
- Calculate stamp duty in Victoria here.
- Calculate stamp duty in Tasmania here.
When do you have to pay stamp duty?
The deadline for paying stamp duty varies by state and territory, but not paying within the required timeframe could result in penalties and interest charges. Here’s a general overview of when you’re required to pay stamp duty:
- ACT: Within 28 days of settlement.
- NSW: Within three months of settlement; for off-the-plan purchases, within three months of completion.
- NT: Within 60 days of the transaction or at settlement, whichever comes first.
- QLD: Within 30 days of settlement.
- SA: On the day of settlement.
- TAS: Within three months of the property transfer (usually on settlement day).
- VIC: Within 30 days of the property transfer (usually on settlement day).
- WA: Within two months of settlement.
Are there any exemptions?
Property transfers due to death, divorce, or between family members often qualify for exemptions, while first home buyers in many states can benefit from either full exemptions or substantial concessions, significantly reducing the upfront costs of buying a home.
How do you pay stamp duty?
Paying stamp duty is relatively straightforward. Most state governments offer online payment options, allowing you to pay by credit card, debit card or bank transfer.
What is stamp duty used for?
Revenue generated from stamp duty is used by state and territory governments to fund public services like health, transport, emergency services, and infrastructure projects.
How do I avoid paying stamp duty?
For most property purchases, stamp duty is an unavoidable cost. However, there are some ways to get around this:
- First home buyer exemptions: Many states offer full or partial exemptions for first home buyers. For example, in Victoria, first home buyers buying a property worth up to $600,000 are exempt from stamp duty, while concessions are available for properties valued between $600,000 and $750,000.
- Buying off-the-plan: Buying a home that hasn’t yet been built in some states can reduce the amount of stamp duty you’re required to pay.
- Concessions for certain buyers: Pensioners, people with disabilities, and those buying in specific regional areas may qualify for stamp duty concessions or exemptions.
- Transferring property between family members: In situations such as inheritances or divorce settlements, stamp duty is often exempt.
- Purchase price below thresholds: Some states have thresholds below which stamp duty is not payable. For example, New South Wales offers a full exemption on stamp duty for first home buyers buying property valued at $650,000 or less.
Need help navigating stamp duty?
If you’re unsure about the stamp duty rules in your state or territory, working with a mortgage broker can help. At Mortgage Express, our team of mortgage brokers is experienced in helping buyers navigate the property market, including understanding stamp duty and other costs involved in buying property in Australia. Get in touch with us today to learn more about how we can help you secure the right home loan and make your property purchase as stress-free as possible.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.