Stamp duty is a “State based” tax levied on certain transactions, including the purchase of real estate. The rate you’ll pay varies in each state and territory.
As stamp duty is a tax, you cannot borrow money to cover it, though it can accommodated for by reducing the amount of your cash deposit and increasing your home loan to cover the difference. This may mean taking out lender’s mortgage insurance (LMI) [What is Lender’s Mortgage Insurance?] to compensate for your reduced deposit.
If you wish to avoid taking out LMI, you must have enough cash savings to cover both the 20 percent deposit, and whatever stamp duty will apply.
State government concessions
Nearly each state government offers some sort of stamp duty concession to first-home buyers. In some states, you’ll pay no stamp duty if you’re a first home buyer, while in others concessions are offered on a sliding scale.
In NSW, the government has abolished stamp duty for first home buyers purchasing new or existing homes worth up to $650,000. For new or existing homes worth up to $800,000, the government will offer first home buyers a stamp duty concession.
For properties between $650,000 and $800,000 the duty concession is gradually reduced. Concessions differ based on whether a new or existing property is being purchased. More information is provided at the NSW Government website.
Don’t worry, it gets more complicated! Like all tax and government related issues these concessions are debated in parliament where they have lots of debates about how it should work. Your Mortgage Broker or Buyers Agent will help you get your head around most of this stuff as it relates to YOUR circumstances.
Stamp duty rates in NSW
In NSW, stamp duty is broken into six brackets. The following table was taken from the Revenue NSW website.
|Not more than $14,000||$1.25 for every $100, or part, of the dutiable value|
|$14,001 to $30,000||$175 plus $1.50 for every $100, or part, by which the dutiable value exceeds $14,000|
|$30,001 to $80,000||$415 plus $1.75 for every $100, or part, by which the dutiable value exceeds $30,000|
|$80,001 to $300,000||$1,290 plus $3.50 for every $100, or part, by which the dutiable value exceeds $80,000|
|$300,001 to $1 million||$8,990 plus $4.50 for every $100, or part, by which the dutiable value exceeds $300,000|
|More than $1 million||$40,490 plus $5.50 for every $100, or part, by which the dutiable value exceeds $1 million|
Property that exceeds $3 million is charged $150,490 plus $7 for every $100, or part, by which the dutiable value exceeds $3 million.
This duty is applicable to:
- A parcel of land on which there is 1 single dwelling or 1 flat, or a parcel of land on which there is a building under construction that, when completed, will constitute 1 single dwelling or 1 flat
- A strata lot, if it is lawfully occupied as a separate dwelling, or suitable for occupation as a separate dwelling
- A land use entitlement, if it confers an entitlement to occupy a building, or part of a building, as a separate dwelling
- A parcel of vacant land that is zoned or otherwise designated for use under an environmental planning instrument (within the meaning of the Environmental Planning and Assessment Act 1979) for residential, or principally for residential purposes.
Stamp duty in other states
You can search stamp duty rates in other states, by visiting each revenue office individually. Alternatively, use the stamp duty calculators on Australia’s two leading property portals, realestate.com.au and Domain.