A state-by-state guide to stamp duty exemptions

By Mark Rosanes

Many aspiring homebuyers think of stamp duty as one of the the biggest roadblocks to their homeownership dreams, so it is not surprising that many are keen on finding ways to avoid paying it.

A recent survey by Gateway Bank found that almost two-thirds, or 63%, of first home buyers felt that removing stamp duty would reduce the time it will take them to save for a house by an average of 20 months, while about a quarter said it would fast-track their homeownership timeframe by three years.

The bank surveyed a representative sample of 700 Australians who are planning to purchase a house in the next four years and close to a third, or 32%, of the respondents also said that the current stamp duty rates are prohibitively high.

But what is the purpose of stamp duty? And why is it much maligned by many aspiring homebuyers? Is there a way you can avoid paying it? Let’s dig a little deeper.

What is stamp duty?

Also known as land transfer duty, stamp duty is a tax imposed by state and territory governments to have the property you bought transferred to your name. It is an additional cost that comes on top of the purchase price and depends on several factors, including on how much you paid for the house, the type of property you purchased, and where it is located.

Our stamp duty calculator can help provide an estimate on how much tax you need to pay for a house you are planning to buy.

Homebuyers are typically required to pay the stamp duty directly to the state or territory’s revenue office within 30 days to three months of settlement. The paperwork can be complex and is best handled with the assistance of your solicitor or conveyancer.

While much maligned, stamp duty has its purpose. The collected funds are put towards improving your state or territory’s services, including healthcare, law enforcement, planning, and infrastructure, so it is worth noting that your money will be going towards the greater benefit.

Can you avoid paying stamp duty?

States and territories have their own rules on who can be exempted from paying stamp duty. Here is a state-by-state breakdown of these exemptions.

New South Wales

First home buyers in NSW are eligible for an exemption from stamp duty for new homes valued less than $800,000 and existing homes not exceeding $650,000, between 1 August 2020 and 31 July 2021 as part of the First Home Buyers Assistance scheme. They can also get transfer duty concessions for new homes worth between $800,000 and $1m, and existing homes valued at $650,000 to $800,000.

For vacant land where a new home will be built, no transfer duty applies if the land is worth less than $400,000. Concessions rates only apply for land valued between $400,000 and $500,000.

No stamp duty is also payable for family homes transferred between a married couple or de facto partners living together for at least two years.

Victoria

Victorian FHBs are exempt from paying stamp duty for properties below $600,000, while a concession is available for homes valued between $600,001 and $750,000.

The state government also announced last November a 50% tariff cut on newly built residential properties and 25% reduction on existing homes and vacant land as part of its COVID-19 economic recovery package. These concessions are available for homes purchased before 1 July 2021.

Additionally, Victoria grants a full waiver of stamp duty to eligible pensioners for home purchases worth up to $330,000, with the full value of the incentive pegged at $12,750. The amount of duty concession also decreases until the upper threshold of $750,000 is reached.

Queensland

FHBs in Queensland are eligible for stamp duty exemptions for properties valued up to $550,000 or vacant land up to $400,000. Concessions also vary depending on the purchase price.

South Australia

The state does not provide stamp duty concessions for first-time property owners but they may qualify for an off-the-plan stamp duty exemption if they buy a new or substantially refurbished apartment valued up to $500,000.

Western Australia

Stamp duty exemptions are available for Western Australian FHBs if they purchase homes worth less than $430,000 and vacant land under $300,000. Concessions also apply for properties between and $430,000 and $530,000, and vacant land between $300,000 and $400,000.

Married couples or those who have been de facto partners for at least two years also do not need to pay stamp duty for property transfers if the house served as their primary place of residence.

A stamp duty rebate, meanwhile, is available for off-the-plan purchases between 23 October 2019 and 23 October 2021, where construction has not commenced. For units under construction, buyers must have signed their contracts between 20 June 2020 and 31 December 2020 to be eligible.

The rebate amount is equivalent to 75% of the transfer duty paid and capped at $50,000 for units that have yet to begin construction and $25,000 constructions that are underway. There is no cap on the purchase price and the scheme can be accessed by buyers who already own property.

Tasmania

FHBs of established homes in Tasmania are eligible for a 50% discount on stamp duty if the property is worth up to $400,000.

Home transfers between married couples or have been de facto partners, however, are exempted from stamp duty if the property served as their PPOR and held as joint tenants or tenants in common in equal shares.

The Tasmanian government also provides a 50% discount on transfer duties, worth about $7,000, for eligible pensioners who sell their home and downsize by purchasing another property. The new property must have a dutiable value not exceeding $400,000 and less than that of the former home.

The downsizer must also have bought the house between 10 February 2018 and 30 June 2022 and must live in the home for at least six months. The scheme was due to end on 30 June 2020 but was extended for another two years.

Australian Capital Territory

In July 2019, ACT’s First Home Owners Grant (FHOG) has been replaced by the Home Buyer Concession Scheme, which provides a full stamp duty exemption for buyers who have not owned any property in the last two years. The government has also imposed the following income threshold:

Number of dependents

Total gross income threshold

(including partners, if applicable)

0

$160,000

1

$163,330

2

$166,660

3

$169,990

4

$173,320

5 or more

$176,650

Source: ACT Revenue Office

Eligible pensioners are also exempted from paying stamp duty for home purchases valued up to $440,000, allowing them to save $9,360. Corresponding transfer duty discounts are also available for properties not exceeding $570,000. The scheme will be in place until 30 June.

For those planning to downsize but have not yet reached retirement age, they may be able to access up to $11,400 discount on stamp duty if they are owner-occupiers buying new single residential blocks or off-the-plan apartments and townhouses worth up to $750,000 until the end of this month.

Northern Territory

Northern Territory gives an up to $18,601 Territory Home Owner Discount (THOD) on stamp duty costs for homebuyers who have not owned property in the territory in the past two years. The value of the property must not exceed $650,000.

The government also offers a $10,000 stamp duty incentive to eligible pensioners for home purchases up to $750,000 or vacant land valued at $385,000. This means downsizers buying properties worth $292,300 do not need to pay transfer duty. The scheme will run until 30 June.

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