Amongst the assemblage of costs associated with walking into your first home, one of the heaviest one-off payments you will make towards the purchase of a property, and at times second in line to the deposit, will be the stamp duty.
Otherwise known as land transfer duty, it’s a tax imposed by the state and territory governments whenever a buyer purchases a property, whether they be a first-home owner or investor – and it can even be enforced when a property is handed over without the new owner having paid a cent toward it, such as when the property is a gift.
The buyer is required to pay the stamp duty fee directly to the state or territory’s revenue office, but the process is best handled with the assistance of a solicitor or conveyancer.
How much is stamp duty?
Whilst one of the most varying elements of stamp duty rests in the differing jurisdictions it sits in from state-to-state, rates also depend on the type of property purchased and its value – and the more a buyer pays for their first home, the higher the stamp duty will be.
With this in mind, it can often exist as an unexpected fee that unveils itself further down the buying process, leaving many buyers caught blind-sided – and being given no choice but to take a few steps back in order to factor the tax into their savings, or overall buying budget.
A buyer can also explore options as to how the stamp duty fee can be brought down, by either buying a property that costs less, or looking into purchasing within another state that is governed by more affordable stamp duty laws and benefits.
Can you avoid stamp duty?
Certain exemptions and concessions apply. For instance, if the property is transferred between family members as a result of a death or divorce, the new owner will not need to pay the stamp duty upon acceptance of the property’s change-of-hand. Some states also waiver stamp duty for first-home buyers up to a certain value, and there are also concession rates for them, as well as for pensioners, carers and farmers.
It’s also worth being mindful of stamp duty’s purpose. The collected funds are put towards upscaling and improving your state or territory’s services, ranging from healthcare, law enforcement, planning and infrastructure, to name a few. So, it’s sometimes added peace of mind that your money will be going towards the greater benefit.
In providing an overall run-down of stamp duty, it’s fundamental to understand that its costs significantly vary, and it’s advised to discuss your stamp duty options earlier on with a solicitor or conveyancer prior to purchasing a property. This allows you to be financially prepared for what’s to come and gives you the opportunity to forward plan, especially if you need to accumulate extra income towards it – just as likely to be done with gathering the deposit.
To help get you prepared, as well as understand when stamp duty needs to be paid, here is a snapshot of stamp duty as applicable to your state or territory.
New South Wales
NSW stamp duty needs to be paid to the state’s revenue office no later than 3 months after settlement day. In the case of off-plan purchases, as long as you plan to reside in the property, there’s a chance you may be eligible to postpone the tax for up to 12 months.
Stamp duty fees can be found in full on the state’s revenue office online – but standard rates for properties purchased for over $80k are as follows.
- Purchases made from $80,001 to $300k: $1,290 will need to be paid, plus $3.50 for every $100 above $80k.
- Purchases made from $300,001 to $1m: $8,990 will need to be paid, plus $4.50 for every $100 above $300k.
- Purchases made for over $1m: $40,490 plus $5.50 for every $100 above $1m.
- Residential purchases made for over $3m: $150,490 will need to be paid, plus $7 for every $100 above $3m.
If you are a first-home buyer, you may be released from having to pay stamp duty with help from the First Home Buyers Assistance Scheme as long as the property is valued for under $800k.
In QLD, stamp duty is payable to the state’s revenue office no later than 30 days after settlement of the property.
The fees are fully outlined on the state’s revenue office online portal – but standard rates for properties purchased for $75k onwards are as follows.
- Purchases made from $75k to $540k: $1,050 will need to be paid, plus $3.50 for every $100 or part thereof which the value is above $75k.
- Purchases made from $540k to $1m: $17,325 will need to be paid, plus $4.50 for every $100 or part thereof which the value is above $540k.
- Purchases made for more than $1m: $38,025 will need to be paid, plus $5.75 for every $100 or part thereof which the value is above $1m.
Different stamp duty rates apply to properties you plan to reside in, which can turn out to be more affordable, and if it happens to be your first home, you will receive a discount as long as the property is valued below $550k.
Stamp duty in SA is usually required to be paid on or before settlement day.
The full breakdown is outlined on SA’s revenue office online – but standard fees for properties purchased for $250k upwards are generally as follows.
- Purchases that exceed $250k but no more than $300k: $8,955 will need to be paid, plus $4.75 for every $100 or part thereof which the value is above $250k.
- Purchases that exceed $300k but no more than $500k: $11,330 will need to be paid, plus $5 for every $100 or part thereof which the value is above $300k.
- Purchases that exceed $500k: $21,330 will need to be paid, plus $5.50 for every $100 or part thereof which the value is above $500k.
- If you happen to be a first-home buyer, then you may be eligible for SA’s first home bonus grant, helping alleviate some pressure off stamp duty costs, and there is also a stamp duty concession rate if the property is bought off the plan.
Stamp duty in TAS needs to be paid by the purchaser within 3 months after the property is transferred, which is usually included in the paperwork signed on settlement day.
The complete list of fees can be accessed on TAS revenue office online – but purchases made for over $200k are as follows.
- Purchases that exceed $200k but no more than $375k: $5,935 will need to be paid, plus $4 for every $100 or part thereof which the value is above $200k.
- Purchases that exceed $375k but no more than $725k: $12,935 will need to be paid, plus $4.25 for every $100 or part thereof which the value is above $375k.
- Purchases over $725k: $27,810 will need to be paid, plus $4.50 for every $100 or part thereof which the value is above $725k.
Stamp duty concession rates are available to first-home buyers, and to pensioners downsizing their homes.
If purchasing in the NT, stamp duty is payable 60 days after the transfer of the property is legally finalised, which would occur on settlement day.
Stamp duty costs in the NT can vary greatly depending on the total property value. Since the rate isn’t guided by certain thresholds as seen with other states, but rather a specific formula, it’s best to input the property value into the state’s stamp duty calculator, accessed through the Northern Territory Government webpage.
Certain concessions and exceptions on stamp duty can be accessed if you are a first-home buyer, pensioner, senior or carer.
In WA, a buyer has 2 months after settlement day to apply for a Duties Assessment Notice through the state’s revenue office. Once the office issues back the notice, which states the stamp duty rate, a buyer then has 1 month to lodge the payment.
A complete run-down of fees can be accessed via the state’s revenue office online – but general rates, starting from properties purchased over $100k are as follows.
- Purchases from $100,001 and $250k: $2,090 will need to be paid, plus $3.80 for every $100 or part thereof which the value is above $100k.
- Purchases from $250,001 and $500k: $7,790 will need to be paid, plus $4.75 for every $100 or part thereof which the value is above $250k.
- Purchases at $500,001 or over: $19,665 will need to be paid, plus $5.15 for every $100 or part thereof which the value is above $500k.
First-home owners can access a grant to go towards the purchase of their property, and they are also eligible for a concession rate as long as their property value does not tip over $530k – and if their property value sits below $430k, they will be exempt from paying stamp duty.
Stamp duty in VIC is required to be paid by the purchaser 30 days after the property is transferred.
The VIC revenue office online details both owner-occupied and investment property rates – but general first-home rates, starting from properties purchased over $440k, are listed as follows.
- Purchases from $440,001 to $550k: $18,370 will need to be paid, plus 6% of the dutiable value above $440k.
- Purchases from $550,001 to $960k: $28,070 will need to be paid, plus 6% of the dutiable value above $550k.
- Purchases over $960k: 5.5% of the dutiable value will need to be paid.
If you are a first-home owner, you will not be required to pay stamp duty as long as your property value is $600k or under, and if it happens to be over this amount, as long it doesn’t sit over $750k, you will be eligible for a concession rate. Such rates may also be reaped by pensioners, farmers, and those purchasing from a plan.
Australian Capital Territory
As part of the new Barrier Free Model introduced by the Government as part of tax reforms, an application needs to be submitted to Canberra Access no later than 14 days after settlement.
Once the buyer receives a Notice of Assessment back, they then have 14 days to pay the instructed stamp duty costs. A lot of changes have occurred since 2017 to rates and procedures, so it’s advised to utilise the ACT revenue office’s online calculator to determine an approximate stamp duty rate.
The ACT’s first home owner grant allows first-home buyers to receive up to $7,000 to put towards the purchase of their property, however it is said this benefit will be abolished from July 1st, 2019.
On the other hand, a new policy will emerge, and one that exempts first-home buyers from stamp duty altogether – as long as their combined household income sits below $160k.
More currently, pensioner and disability concession schemes are able to be obtained.
For further, and more detailed information on how stamp duty applies in your state, it’s advised to gain the professional help of an expert, such as a mortgage broker, solicitor or conveyancer who operates in the state you are buying within. You can also visit the following Government websites:
- NSW State Revenue Office
- Queensland Treasury
- South Australia Revenue Office
- Tasmanian State Revenue Office
- Northern Territory Treasury
- Western Australia Department of Finance
- Victorian State Revenue Office
- Australian Capital Territory State Revenue Office
All amounts and rates current as of March 2019.