Taxes are an unavoidable part of life for every Australian, but they don’t just apply to your income. In fact, when buying or building a home, you’ll be liable to pay certain property taxes such as stamp duty. But why is stamp duty an added expense, and could you avoid paying it? Let’s explore with this complete guide to stamp duty.

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What is Stamp Duty?

When buying a home in Australia, stamp duty is an additional fee on top of the cost of your property (among various other expenses like conveyancing, pest inspections, etc.).

Essentially, it’s a property tax that covers certain costs such as changing the home’s title and ownership details. Because the amount can be quite high, it’s important to understand how much stamp duty you’ll pay on your home. Every state works differently with stamp duty, so you may end up paying more stamp duty in one state than in another, even if the property’s purchase price is identical.

The good news is there are certain exemptions for stamp duty, especially if you plan to build or buy your first new home, such as in a residential community development.

Stamp Duty Exemption

Because the cost of stamp duty can be substantial, the government provides exemption depending on your eligibility and which state you live in.

Do First Home Buyers Pay Stamp Duty?

For first home buyers, stamp duty can represent a substantial cost – especially when you’ve spent years saving for a deposit. The First Home Owner Grant is a national initiative managed by individual states and territories. In some states, first home owners may find they don’t pay any stamp duty at all (depending on their eligibility), while in other parts of Australia stamp duty is always payable.

Who Else is Eligible for Stamp Duty Exemption?

Both health card holders and pensioners may be liable for a reduced stamp duty tax or an exemption depending on their circumstances. You’ll need to contact the State Revenue Office in your applicable state to find out more.

How Much is Stamp Duty?

If you’re looking to buy or build a new home in a development – such as Harmony on the Sunshine Coast, Brentwood Forest near Brisbane, Waterford in the Hunter Region, Savana in Wyndham Vale, and both Hillstowe and Bloomdale in Victoria – then you may be eligible for a first home owner’s grant. Make sure you check with the New South Wales, Victoria and Queensland state offices. Here’s all the information on stamp duty in these states.

Stamp Duty in NSW

Stamp duty in NSW is paid within three months of the settlement date. Some off-the-plan purchases may allow you to extend stamp duty payment up to 12 months, so long as you intend to reside in the premises. Fees are as follows for properties:

  • Over $83,000 and up to $310,000 = $1,340 plus $3.50 for every $100 over $83,000.
  • Over $310,000 and up to $1,033,000 = $9,285 plus $4.50 for every $100 over $310,000.
  • Over $1,033,000 = $41,820 plus $5.50 for every $100 over $1,033,000.

Over $3,101,000 = $155,560 plus $7 for every $100 over $3,101,000.

Stamp Duty in Victoria

The buyer must pay stamp duty within 30 days after settlement. There are different rates for both owner-occupied and investment properties, which you can find from the State Revenue Office, but first-home fees for properties:

  • Over $440,000 and up to $550,000 = $18,370 plus 6% of the dutiable value above $440,000.
  • Over $550,000 and up to $960,000 = $28,070 plus 6% of the dutiable value above $550,000.
  • Over $960,000 = 5.5% of the dutiable value.

Stamp Duty in QLD

Stamp duty in Queensland must be paid within 30 days of settlement. Rates for properties:

  • Over $75,000 and up to $540,000 = $1,050 plus $3.50 for every $100, or part of $100, over $75,000.
  • Over $540,000 and up to $1 million = $17,325 plus $4.50 for every $100, or part of $100, over $540,000.
  • Over $1 million = $38,025 plus $5.75 for every $100, or part of $100, over $1 million.

Stamp Duty FAQs

Is stamp duty tax deductible?

Regardless of whether you are an investor or an owner-occupier, you cannot claim stamp duty as an expense on your tax. Stamp duty on investment properties may, however, help you reduce any capital gains tax if you later decide to sell the property.

When do you pay stamp duty?

This varies depending which state you have purchased in. Visit your relevant State Revenue Office for more information on fee schedules.

Who pays stamp duty?

The buyer pays stamp duty. You may be exempt from paying stamp duty if you fit within certain criteria; check with your state government body for more information on exemptions.

Do you pay stamp duty when you sell a house?

No, the seller does not pay stamp duty; the purchaser pays this cost.

Can you defer stamp duty?

In some cases, you may be able to defer stamp duty – for example, if you’ve purchased off the plan. Visit your State Revenue Office for more information.

You can use a stamp duty calculator for a more specific amount. It will take into account your state or territory, the property’s value, the property type (primary residence of investment home), and whether or not you are a first home buyer.

At AVID, we create places where people love to belong. To find out more about our developments around the country and how you can invest in the home of your dreams, contact us today.