Stamp duty (otherwise know as land transfer duty) goes hand-in-hand with buying property in Australia, but what is it, exactly? Simply put, it’s a tax that’s payable on most property purchases, as well as some other types of purchases. In the realm of property, stamp duty covers the costs of changing the title of the property and ownership details.
How is stamp duty calculated
The amount of stamp duty you’ll need to pay when buying a property is calculated based on factors like:
- the value of the property
- the type of property you are buying (owner-occupier vs. investment property) and
- the state or territory you live in
Depending on your circumstances, you may qualify for an exemption of stamp duty. If you’re seeking out a home loan, make sure you have enough saved to cover the final expenses of buying your property – including stamp duty.
What purchases are eligible for stamp duty
Transactions that are subject to stamp duty include the following:
- Transfers of property (such as businesses, real estate or certain shares)
- Leases and mortgages
- Motor vehicle registration and transfers
- Insurance policies and
- Hire purchase agreements.
How much will I pay in stamp duty
There are a number of factors involved in working out how much stamp duty you need to pay. We’ve made it easy to work out the amount you may be required to pay on a property purchase with our handy stamp duty calculator.
Stamp duty discounts for first home buyers
If you’re buying your first home, you may be entitled to concessions on stamp duty or a total exemption. In some states, first home buyers don’t have to pay any stamp duty, while in other states stamp duty is payable but at a lower rate than the regular stamp duty rates. You may also be able to put your first home owner’s grant (if eligible) towards the cost of stamp duty.
Here’s a state-by-state breakdown of stamp duty discounts for first home buyers nation wide. Keep in mind that stamp duty rates are subject to change, so it’s best to check with your state revenue office to find out what applies to you.
From 1 July 2019, first home buyers in the ACT with a household income below $160 000 will pay no stamp duty, regardless of whether they buy a newly built or established home.
To be eligible, all buyers must be at least 18 years old, they must satisfy the Home Buyers Concession Scheme (HBCS) current and previous home ownership test, and at least one buyer must satisfy HBCS residency requirements.
The NSW First Home Buyers Assistance Scheme offers eligible buyers exemptions or concessions on property transfer duty. This includes an exemption from stamp duty for both new and existing dwellings valued up to $650 000 and concessions on duty for homes valued between $650 000 and $800 000.
First home buyers in Victoria buying a dwelling valued below $600 000 are exempt from stamp duty, and those buying a property valued between $600 000 and $750 000 are eligible for a stamp duty concession. It doesn't matter whether you buy a new or established home as long as all the purchasers of the property meet the First Home Owner Grant (FHOG) eligibility criteria.
In Queensland eligible first home buyers can claim the First Home Concession for homes valued under $500 000 which will result in no duty payable. For homes valued between $500 000 and $550 000 the concession will reduce the amount of duty you are required to pay.
Queensland buyers who have owned a home before may also be eligible for the Home Concession. This home concession rate applies to the first $350 000 of the consideration or value of the residence, and the general transfer duty rates then apply to the balance.
West Australian first home buyers who qualify for the First Home Owner Rate (‘FHOR’) of Duty, pay no stamp duty on properties valued under $430 000 and only a concessionary rate on properties valued between $430 000 and $530 000.
There are no exemptions specific to first home buyers in South Australia, but you may be eligible for the off-the-plan stamp duty concession if you purchase a new or substantially refurbished apartment, capped at the stamp duty payable on a $500 000 valued apartment.
There are no concessions or exemptions from stamp duty for first home buyers in Tasmania.
Stamp duty discounts are available for first home buyers in the Norther Territory who purchase an established home up to the value of $650 000. The First Home Owner Discount (FHOD) is a full stamp duty concession on the initial $500 000 value of the home.