What is stamp duty?

Stamp duty, also known as ‘transfer duty’ in Tasmania or just ‘duty’ in Western Australia, is a state government tax that revenue offices levy on customers whenever they purchase anything property-related. In less technical terms, it can be referred to as the hefty amount that home buyers need to bay upfront when purchasing a property.

The NSW Government 2022-2023 State Budget revealed that from next year, eligible first home buyers will have the option to choose between paying the lump sum of stamp duty or annual land tax

How much does stamp duty cost?

As a rule of thumb, buyers should budget for stamp duty to cost around 4% of the purchase price of a property or around $16,000 for a property worth $400,000. Also, keep in mind that the more expensive your property value is, the higher the stamp duty will be. 

Because there isn't a universal value imposed on various properties, the amount that buyers have to pay for stamp duty isn't set in stone as it depends on the rates provided by the state's revenue offices. In other words, stamp duty rates and rules can vary from one state to another. How much duty you will be charged depends on three factors:

  1. Where the property or land is located (which state/territory)
  2. The type of property (e.g. residential, investment, house, etc.)
  3. How much the property is worth 

If you're curious as to how much you'll have to pay in stamp duty, use the Stamp Duty Calculator to work out your total cost.

When is stamp duty payable?

Stamp duty is most commonly paid upfront on settlement of a property to avoid delays and running the risk of incurring interest charges. However, it is important to note that payment requirements differ from state to state.

Does stamp duty come out of my cash deposit?

Yes, stamp duty is an upfront cost which is paid in addition to a deposit on a property. As such, buyers have to save an extra 20% for their deposit after factoring in the effects of stamp duty. 

How do I calculate my stamp duty?

A quick way to calculate the likely stamp duty cost is to use a stamp duty calculator. Just enter the expected purchase price of the property in your state to get a projection of stamp duty costs.

Can I add stamp duty onto the balance of my loan?

No; however, the way this can be accommodated in practice is that stamp duty will come out of your cash deposit while the loan amount will increase to compensate. As an industry standard, borrowers require at least a deposit of 10% to add stamp duty and a Lenders Mortgage Insurance (LMI) fee onto the principal of the loan. 

It is worth budgeting for at least $3,500 in additional buying costs to pay for conveyancing, a building inspection, valuation fees from both your bank and an independent valuer, and establishment and settlement fees for your home loan.

First home buyers exemptions:

  • ACT and Queensland are both stamp duty free for first home buyers.
  • For new constructions, NSW is stamp duty free for purchase prices under $600,000 while in Tasmania, stamp duty is paid only on the land and not on the building component.

Does the type of home purchased affect stamp duty?

Yes, it does. A property full of bells and whistles can actually see a rise in duty, while a vacant property will see a significantly lower tax bill compared to when you buy a land and house package. 

There's no way that you can dodge paying your stamp duty. However, there are ways to avoid cashing out much more from your bank account such as choosing a cheaper property, changing states, and lowering your building costs. 

Most states, if not all, offer concessions and exemptions for first time buyers. It's a great financial boost for people who are looking for their first-owned pads of people settling down to start a family. If you are eligible for one of the first home buyer relief options, one of the common stipulations, like in Victoria, is that you must reside in your property for at least 12 months.

Aside from first time buyers, there are other criteria that treasury offices consider for stamp duty relief. This includes pensioners or health care card holders.

Do you have to pay stamp duty when refinancing?

If you're considering switching lenders for your home loan, stamp duty may apply.

You can avoid paying stamp duty on a mortgage provided that when you refinance, the borrowing entity/ies remain the same and also the mortgage amount. 

When you refinance, if you increase the loan, you will have to pay stamp duty on the portion of the loan that is new e.g. the difference. In most instances, the new lender will require the mortgage to be stamped for the full amount, but you can then claim back from the Office of State Revenue the portion that relates to the existing 'refinance' amount.

The OSR in your respective state should be able to provide you with more specific information on this.

Stamp duty for investors explained

As a quick guide for property investors, below are stamp duty charges for a $400,000 investment property in each state and territory. Victoria is the most expensive place for stamp duty, while ACT, NSW and QLD are all fairly equal as the cheapest for existing dwelling investment purchases.

Stamp duty payable around the country for a $400,000 investment property (non-first home buyers)

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stamp duty*

















*Including mortgage registration fee and transfer fee

Deposit levels required for investors

Investors need to be realistic about how stamp duty will affect their savings levels required to purchase their next investment property. Below are three investors who bought a $400,000 investment property in NSW:

Investor buys in NSW

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Type of property

established property

established property

newly constructed

Saved deposit




Purchase price




Gov’t grant




Stamp duty




Mortgage registration fee




Transfer fee




Total upfront government charges plus LMI fee*




Loan-to-Value Ratio




less LMI fee*




Deposit left after upfront costs and LMI fee paid




*This example assumes LMI is paid upfront. Many lenders do in fact allow LMI to be capitalised onto the principal of the loan.

It is important for investors to always keep the taxing effect of stamp duty top-of-mind, as the above example demonstrates. 

Here, both Brad and Jenny’s 20% deposit is depleted by stamp duty, which takes them into costly LMI territory, driving their upfront costs up by three grand a piece. And, given that the additional upfront costs of conveyancing, home loan costs and reports could add up to around $3,500 for a property at this price range, they could be in for even more cost trouble.

That takes Brad’s total upfront costs to $20,642. Or, expressed against his initial savings, upfront costs would take 26% of his savings. 68% of his costs were stamp duty.

Even Jenny, who received a government grant for purchasing a newly constructed property, didn’t scrape over an 80% LVR after stamp duty.

Fran, on the other hand, escaped paying LMI after paying upfront costs and stamp duty, with a deposit 25% of the level of the purchase price.

Stamp duty is a deposit killer that could reduce your deposit by 20%. Plan ahead for the effects of stamp duty by budgeting for what you’ll owe in upfront tax.

Article first published by Your Mortgage, 12 May 2013. Last updated by Hanan Dervisevic, 22 June 2022.

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Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .