Blog What is stamp duty?

What is stamp duty?

16 April 2017
What is stamp duty?

To buy a property you will need to pay a variety of fees and charges. One of the biggest upfront costs of a home loan is stamp duty.

Stamp duty is a tax imposed by state governments in Australia on the purchase of assets such as real estate.

How much is stamp duty?

There are many factors involved in determining the cost of stamp duty for a property. These include:

  • The state you’re buying in – All states have different methods of calculating stamp duty so the amount will differ.
  • The price of the property – In general, the cheaper the property is the less stamp duty you will pay.
  • The type of home you’re buying – Vacant land will have less stamp duty compared to an established home.

For example, if you’re buying a home in NSW which costs $500,000 then you are required to pay stamp duty of $18,262. But if you’re buying a property of the same value in Queensland, you will only pay $10,156 in stamp duty.

There are many factors that affect the amount of stamp duty levied on a property in each state. We recommend that you use a stamp duty calculator to estimate what you are likely to pay.

Who is exempt from paying stamp duty?

A first-time buyer in some states can be exempt from paying stamp duty and can benefit from further concessions. The legislation makes it easier for people to buy their first home. NSW is probably the most generous of them all. If the newly constructed home you are looking to buy costs less than $550,000 then you don’t need to pay stamp duty.

Pensioners and health card holders can often qualify for a concession or exemption. You may ask your local Office of State Revenue to find out if you are eligible for any stamp duty exemption.

How to minimise the amount you pay?

In most states, a property that’s worth more than $500,000 will incur a large amount of stamp duty. Vacant land that is over $300,000 will also have a higher cost of stamp duty. So if you buy a home or land that’s below these amounts you will pay less.

You can also negotiate with your seller to lower the price of the property to reduce the cost of stamp duty.

Final thoughts

Stamp duty can be a significant addition to your expenses when buying a home. You can find out more by visiting the website of your state's Office of State Revenue: