What is stamp duty?
When you’re buying a home you’ll hear lots of phrases tossed about. And one of the most important to understand is stamp duty.
Our experts have weighed in to give you the down low on stamp duty. From answering the question, ‘What is stamp duty?’ to the relevant exemptions in your state.
What is stamp duty?
Stamp duty – sometimes referred to as ‘transfer duty’– is a tax that you pay when you acquire a property. It’s important that we understand that ‘acquire’ means buying a home, of course. But it also includes homes that are gifted to you or that you receive as part of a trust. It doesn’t include homes you inherit via a will, however.
Stamp duty is governed by each state, so there will be some differences depending on where you are buying the home.
Stamp duty rates by state
When you’re asking yourself, ‘what is stamp duty’, it’s best to ask instead, ‘what is stamp duty in my state’. In Queensland, for example, there’s no stamp duty for properties less than $5,000. And you’ll pay a rate of $1.5% for properties valued between $5,000 and $75,000. This rises for homes in the $75,000 to $540,000 price bracket, and again for homes up to a $1 million and again for homes over $1 million.
Queensland Transfer Duty Rates
Source: Queensland Government
Other states have their own rate calculations. For more information on how stamp duty applies in a specific state just head to the relevant website below.
- New South Wales
- Australian Capital Territory
- Victoria
- South Australia
- Western Australia
- Tasmania
- Northern Territory
Stamp duty concessions and exemptions
Stamp duty can seem like a huge amount to pay, particularly if you’re already stretching to buy your home. But every state also has concessions and exemptions in place that can ease that burden.
First home buyers
One of the most important to be aware of is the first home buyers exemption. If you have never purchased a home before, you might be eligible to have your stamp duty lowered. In Queensland there is a ‘first home concession’ that applies when acquiring your first residence. To be eligible you need to:
- Be a first home buyer
- Be accessing the first home concession for the first time (or the first home vacant land concession)
- Have never had an interest in another residence either here in Australia or overseas
- Move into the home and live there within one year of settlement (and not sell the home before you move in!)
- Pay market value
- Be over 18
If you meet the eligibility requirements you may pay no stamp duty at all (for homes under $500,000) or pay a reduced amount.
Other states have similar rules. For example, in New South Wales you could qualify for a full or partial exemption on transfer duty under the First Home Buyers Assistance Scheme.
’Off the plan’ buyers
In some states you might be eligible for a special concessional stamp duty rate if you are making an ‘off the plan’ purchase. In New South Wales, for example, you might be eligible to defer your stamp duty for up to a year if you buy a home off the plan and intend to use it as your main residence. Each state will have their own eligibility requirements and concessions.
Other concessions
Some states may offer other concessions as well. For example Queensland offers the home concession rate for certain home purchases even if you are not a first home buyer instead. And Victoria offers a 50% duty reduction on new or established properties with a value of up to $600,000.
Each state will have their own specific concessions and exemptions and requirements for eligibility. It’s a great idea to speak to a home loan specialist who can give you insight into what you might be eligible for in your own state.
Paying your stamp duty
Stamp duty is an upfront cost when you buy a home. That means that you need to consider the price of stamp duty when you’re calculating your budget for buying a home. Our team is happy to help, or check out our home buying costs calculator online, which will help you calculate some of the costs of buying a home, including the stamp duty.
