Stamp Duty in Australia : The Definitive 2023 Guide
For most home buyers, paying stamp duty in Australia is an unavoidable step in property ownership. It is arguably the single most expensive cost you’ll have to pay in acquiring a property, whether a house, vacant land or off-the-plan apartment.
So what exactly is Stamp Duty in Australia?
Stamp duty is a tax charged by the Australian states and territory governments on certain documents and transactions – the main one being property transactions.
The states collect the tax and spend it on infrastructure, public facilities, and healthcare, amongst other things.
How much is Stamp Duty on property in Australia for properties?
The stamp duty cost for most properties typically ranges between 4% to 5% of your property’s value. For example, if your property purchase price is $1,000,000, then the Australia stamp duty rates payable is approximately $40,000 – $50,000.
Stamp duty is calculated based on three core variables:
- The property purchase price,
- Location, e.g. NSW
- Intended purpose, e.g. Primary residence or investment
Each state government has its way of calculating stamp duty, so figures will vary depending on the variables you enter.
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- First Home Buyer means that it’s the first time you bought a home in which you will be living for at least six months of the first 12 months of ownership. For an Australian expat, this is usually always ‘No’.
- Foreign Purchaser means that you are not an Australian citizen or Australian Permanent Resident. If you are an Australian expat, you are not a Foreigner Purchaser.
- Transfer fee is a state government fee for updating the land’s ownership title records to your name.
- The mortgage fee is another government fee for registering your mortgage and the lender as mortgagee on your property.
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When do you have to pay the Stamp Duty in Australia?
Your stamp duty deadline will vary from State to State. Your appointed conveyancer, solicitor or settlement agent will advise you and assist with paying the stamp duty to the State’s Revenue Office (SRO).
If you are obtaining a mortgage, the solicitors usually pay the stamp duty on the day of settlement. Use the funds available at settlement from the loan proceeds or your contributions.
The Australian property stamp duty deadlines for different state
| State | Deadline |
|---|---|
| NSW | Stamp Duty is to be paid to the SRO within 90 days of settlement. If purchasing off-the-plan, Stamp Duty is payable within 90 days of signed contract date. |
| VIC | Stamp Duty is to be paid to the SRO within 30 days of settlement. |
| QLD | Stamp Duty is to be paid to the SRO within 30 days of settlement. |
| WA | Stamp Duty is to be paid to the SRO within 30 days of receiving the Duties Assessment Notice. To receive the Assessment Notice you’ll first have to lodge your Transfer documents to the SRO within 60 days of the settlement. |
| NT | Stamp Duty is to be paid to the SRO within 60 days of entering into a transaction or settlement, whichever is earlier. |
| SA | Stamp Duty is to be paid to the SRO on the day of settlement. |
| TAS | Stamp Duty is to be paid to the SRO within 90 days of settlement. |
| ACT | Stamp Duty is to be paid to the SRO within 14 days of receiving the Notice of Assessment. To receive the Assessment Notice you’ll first have to lodge your Transfer documents to the SRO within 14 days of the settlement. |
Do you need to pay Foreign Buyer Property Stamp Duty Surcharge in Australia?
In the last few years, the Australian state governments have imposed additional stamp duty of up to 8% for anyone who is a foreign buyer. This surcharge gets added on top of the standard stamp duty.
There is currently no Foreign Buyers’ Stamp Duty Surcharge in the Northern Territory and the ACT. In NSW and VIC, it’s 8%, and for the rest of the states, it is 7%.
Stamp duty surcharge is common practice amongst other developed countries to help curb the strong demand for foreign investment into residential properties, control housing affordability, and generate extra tax revenue.
Countries such as Hong Kong, Singapore and Canada have implemented similar measures with comparatively harsher fees, as high as 20% additional Australian property stamp duty on top of the standard fee!
Foreign Buyers' Stamp Duty can be an unexpected shock
Here are two scenarios where the Foreign Buyers’ Stamp Duty in Australia applies:
- Foreign national buys a $1,250,000 property in NSW, equating to a standard stamp duty of $54,052 plus an Australian stamp duty for Foreign Buyers of $100,000 for a total of $154,052.
- Australian citizen buys a $1,250,000 property in NSW with a foreign spouse, jointly owned 50/50. This would equate to a standard Stamp duty of $54,052 plus a Foreign Buyers’ Duty of $50,000 for a total of $104,052.
The alternative is to purchase in the Australian spouse’s name and only have to pay the standard stamp duty of $54,052.
In some cases, you’ll still be able to have your foreign national spouse on the Home loan application if you need to show more income for borrowing capacity. They won’t appear on the title of the property.
How to reduce or avoid paying Stamp Duty altogether
In some circumstances, you may be able to get a concession or exemption from paying stamp duty tax in Australia.
If you are residing overseas, it’s highly unlikely you’ll be eligible for the First Home Owners stamp duty concessions, as you’ll need to live in the property for at least six months of the first year of ownership.
But fret not.
You can purchase multiple investment properties in Australia while overseas and still be eligible for the First Home Owner benefits once you return to Australia.
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Stamp duty tax concessions and exemptions in Australian states
Stamp Duty Calculator NSW
COVID-19 recovery plan – (1st August 2020 – 31st July 2021)
First-time homeowners purchasing primary residence (new homes only):
Purchase price <=$800,000 = Stamp duty exempt
Purchase price $800,001 – 999,999 = Stamp duty concession
Purchase price $1 million+ = No concession
———————————————
First-time homeowners purchasing primary residence (established):
Purchase price <=$650,000 = Stamp duty exempt
Purchase price $650,001 – 799,999 = Stamp duty concession
Purchase price $800k+ = No concession
First-time homeowners purchasing vacant land (to build on later):
Purchase price <=$400,000 = Stamp duty exempt
Purchase price $400,001 – 499,999 = Stamp duty concession
Purchase price $500k+ = No concession
Stamp Duty Calculator VIC
First-time homeowners purchasing primary residence:
Purchase price <=$600,000 = Stamp duty exempt
Purchase price $600,001 – 749,999 = Stamp duty concession
Purchase price $750k+ = No concession
Pensioners, farmers, and people purchasing from a plan are also eligible for Stamp duty concessions or exemptions to varying degrees.
Stamp Duty Calculator QLD
First-time homeowners purchasing primary residence:
Purchase price <=$500,000 = Stamp duty exempt
Purchase price $500,001 – 549,999 = Stamp duty concession
Purchase price $550k+ = No concession
First-time homeowners purchasing vacant land (to build on later):
Purchase price <=$250,000 = Stamp duty exempt
Purchase price $250,001 – 399,000 = Stamp duty concession
Purchase price $400k+ = No concession
Stamp Duty Calculator WA
First-time homeowners purchasing primary residence:
Purchase price <$430,000 = Stamp duty exempt
Purchase price $430,000 – 530,000 = Stamp duty concession
Purchase price >$530,000 = No concession
First-time homeowners purchasing vacant land (to build on later):
Purchase price <=$300,000 = Stamp duty exempt
Purchase price $300,001 – 399,000 = Stamp duty concession
Purchase price $400k+ = No concession
Currently, there is a 75% stamp duty discount for anyone purchasing off-the-plan (pre-construction) until 23 October 2021
Other types of exemptions apply to family farm transactions between family members.
Stamp Duty Calculator NT
First-time homeowners purchasing a primary residence can get $18,601 off their stamp duty.
It equates to a $430,000 stamp duty exemption.
$430,000 – $650,000 = $18,601 discount
>$650,000 = no concession.
There are also exemptions and discounts for seniors, pensioners, or carers.
Stamp Duty Calculator SA
There are no Stamp Duty exemptions of concessions.
Stamp Duty Calculator TAS
Exemptions are available for first-home buyers and pensioners.
First-home buyers and Pensioners in Tasmania can receive a 50% concession on stamp duty when purchasing a property valued up to $400,000 until 30 June 2020.
Stamp duty exemption is also applicable for married couples transferring primary residence property from a sole name into a joint name.
ACT Stamp Duty Calculator
The ACT offers the Home Buyer Concession Scheme for buyers buying new properties, established properties or vacant blocks of land (from 1 July 2019).
There are several conditions, including that the applicant/s can not have held an interest in any land in the last two years.
They’ll also need to live in the property for at least one year after buying it.
They also need to have an income that is lower than the threshold. For those with no dependent children, this threshold is $160,000 for the year before the property transfer, grant or agreement of property transfer – whichever is first. For those with one child, it’s $163,330.
Other stamp duty on property exemption scenarios
In cases of divorce mandated by Court Order, stamp duty will be waived when transferring properties to the other party.
If a family member passed away and in their Will, it’s stated the properties are to be passed down to you, then Stamp Duty will also be waived.
How to borrow the entire Australian Stamp Duty in your mortgage
In most cases, the banks will only lend you up to 80% of your property’s value, which means you’ll still need to come up with the remaining 20% deposit yourself, plus the 4% – 5% stamp duty rate, so the total contribution required is approximately 25%.
Using an example of a $1,000,000 property, you’ll need $250,000 for your contribution.
So how can you come up with that $250,000?
Releasing Equity (Top-up/cash out) from an existing property to pay the Stamp Duty tax
If you have an existing Australian property, you can offer that property as additional security, and the bank will allow you to borrow up to 80% of its value.
For example:
- You have an existing property worth $500,000 with a current loan balance of $150,000.
- The bank will allow you to borrow up to 80% of the value, so a maximum potential loan of $400,000.
- You top up your loan from $150,000 to $400,000, a $250,000 cash out or equity which you then take and pay for the remainder of the first purchase, effectively borrowing the entire amount of the purchase and the stamp duty.
Family Guarantor home loan to help pay the stamp duty rate
This method doesn’t require you to have any existing properties, but it does rely on your parents having one.
It’s the same concept as the first method. Your parents offer their property as additional security to the bank, and assuming there’s sufficient equity available in their property; the bank will allow you to borrow up to 80% of the value.
Lender’s Mortgage Insurance (LMI) to support the Australian stamp duty charge
You can borrow up to 90% of the property’s value by paying Lender’s Mortgage Insurance (LMI) to the bank. If you borrow 80% or lower, there is typically no LMI fee payable.
If you borrow 90%, the LMI fee would be approximately 2-3% of the property value and gets added on top of the loan amount. For the $1,000,000 purchase, you could borrow $900,000 by adding a $20,000-30,000 LMI fee on top of your loan. Your total loan amount would be $920,000-930,000.
Paying LMI is only something we’d recommend if you can’t do the first two methods, if you need more savings/deposit, or if you want to enter the property market sooner rather than later.
Australian stamp duty costs may come as an unwelcome surprise
Lack of foresight into the cost of stamp duty can derail your property-buying journey and sometimes give you a nasty surprise after signing an unconditional purchase contract, especially if there’s a foreign citizen involved.
That said, the hefty tax bill is mostly unavoidable. To ease the pain, look at it as your tax-deductible donation to the State government in its efforts to make Australia a more desirable place to live!
Speak with one of our tax specialists to find out how you can prepare for and save on Australian property stamp duty.
Contact the State Revenue Office today!
| State | Revenue Office Contact |
|---|---|
| NSW | www.osr.nsw.gov.au |
| VIC | www.sro.vic.gov.au |
| QLD | www.osr.qld.gov.au |
| WA | www.osr.wa.gov.au |
| NT | www.treasury.nt.gov.au |
| SA | www.revenuesa.sa.gov.au |
| TAS | www.sro.tas.gov.au |
| ACT | www.revenue.act.gov.au |
Take the first step towards the right home loan.
Apply online to get expert recommendations with real interest rates and repayments.
Frequently Asked Questions
The amount of stamp duty that needs to be paid depends on a few factors, including the value of the property and the state or territory in which the property is located. Stamp duty rates can vary widely between states and territories, so it’s important to check the specific requirements of your location.
In addition to property purchases, stamp duty may also be applied to other transactions such as motor vehicle purchases and certain business transactions. Some exemptions and concessions are available for stamp duty in certain circumstances, such as for first-time homebuyers.
The Australian stamp duty is calculated as a percentage of the purchase price of the property being bought. The Australia stamp duty rate varies between states and territories, and it may be higher for properties that are not being purchased as a primary residence. The location of the property also plays a role in the calculation, as different areas may have different rates. Additionally, the residency status of the buyer can also impact the stamp duty calculation, with higher rates often applying to foreign buyers. It is important to use a stamp duty calculator or seek professional advice to determine the exact amount of stamp duty payable for a property purchase.
No, Australia stamp duty rates vary between different states and territories in Australia. It is important to check the rates for the state or territory where the property is located. You can use a stamp duty calculator to calculate the exact amount you need to pay.
Some states and territories offer exemptions or concessions for certain types of property purchases, such as first home buyers or properties under a certain value. It is important to check with the relevant state and territory government for details.
Stamp duty is typically payable at the time of settlement, which is when ownership of the property officially transfers from the seller to the buyer. It is important to factor in the stamp duty costs when budgeting for a new property purchase in Australia.
Yes, in some states. The state governments have imposed additional stamp duty of up to 8% for anyone who is a foreign buyer. However, there is currently no Foreign Buyers’ Stamp Duty Surcharge in the Northern Territory and the ACT.
