What is Stamp Duty?

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Updated 28/06/2024
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Written by

Francis Taylor

Updated 28/06/2024

What changed?

Expanded content, updated sources, linked to internal state based pages 
Our aim is to help you make better informed decisions. That’s why iSelect’s content is produced in accordance with our fact-checking and editorial guidelines.

Find out more about how we make money.

View our Privacy Policy.

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What is stamp duty and transfer duty?
Who is required to pay stamp duty?
How much does stamp duty cost?
When do I have to pay stamp duty?
Why is stamp duty so expensive?
Can I add stamp duty to my home loan?
Where can I find and compare home loans?

Looking to buy a house? You’ve probably already got a lot on your mind: home deposit, future repayments and moving costs—just to name a few! 

Still, we can’t have you forgetting about stamp duty. It’s a pretty big cost when it comes to buying a house, usually a few thousand dollars, and it’s often overlooked. Fortunately, you can also plan ahead for it, factoring it into your costs so it doesn’t come as a nasty shock. 

What is stamp duty and transfer duty? 

Let’s start with the basics.  

Stamp duty—which also goes by ‘transfer duty’ in some states—is a special type of tax. It applies to certain purchases and legal agreements, including: 

  • Property purchases
  • Motor vehicle registration and transfers
  • Insurance policies
  • Hire purchase agreements
  • Transfer of certain shares 

These all involve some kind of legal document or a transfer of ownership. For instance, when buying a new home, you would have the property registered in your name. Insurance policies, on the other hand, simply involve an agreement between the insurer and insured. 

Who is required to pay stamp duty? 

Most people will end up paying stamp duty when they purchase a property. Like GST or student loans, it’s just one of those things you’ll probably need to pay. This is especially true if you fall into one of the following categories: 

  • Homebuyers
    Most folks purchasing a residential property will have to pay stamp duty. That being said, you might be eligible for a concession or exemption if you’re buying your first house or piece of land. Just keep in mind that this depends on the price of the property and where you’re buying it. 
  • Investors
    Investment properties also attract stamp duty. In fact, compared to a home in which you plan to live, the stamp duty for investment properties can actually be higher in some states. 
  • Family transferees
    Stamp duty will usually apply if a family member transfers a property into your name. However, the rules around this also differ between states and territories.
  • Business entities
    Even faceless corporations can get hit by stamp duty! In most states, business entities that purchase real estate will almost always have to pay this tax. The big exception here is Victoria, which will phase out stamp duty on commercial and industrial properties as of 1 July 2024.1State Revenue Office Victoria – Commercial and industrial property tax from 1 July 2024
  • Foreign purchasers
    People buying a residential property from overseas will usually pay an additional, foreign purchaser duty on top of stamp duty. This being said, exemptions can apply depending on the state and territory. 

Now, some good news. If you’ve inherited a home then you might not be required to pay much (or any) stamp duty. However, like everything involving property, this can also vary from state to state. 

How much does stamp duty cost? 

If you’re a purchaser who’s buying a place to live, then your stamp duty will usually come down to three things:

  1. How much the property costs.
  2. If you’re eligible for a concession or exemption 
  3. The state or territory where you buy it 

That last one can also make a few thousand dollars’ worth of difference. Fortunately, we’ve put together a detailed breakdown for each state and territory: 

This will give you a good idea when it comes to how much you’ll end up paying in your particular neck of the woods. Alternatively, give the calculator at the top of the page a quick whirl if you’re after a more personalised estimate. 

When do I have to pay stamp duty? 

If only stamp duty was something you could defer! Alas, most cases are pretty cut and dry: it’s something you typically pay when the purchase is settled or within 30 to 90 days of the settlement date. 

Of course, this too can vary quite a bit depending on the state or territory where you buy the property: 

State or territoryTypical timeframe
Victoria 30 days of settlement 
New South Wales 3 months of signing a contract for sale or transfer 
Queensland 30 days of settlement 
Western Australia 1 month after duties assessment notice is issued 
Australian Capital Territory 14 days of settlement 
South Australia Prior to or at the time of settlement 
Northern Territory 60 days of settlement 
Tasmania 3 months of settlement 

In most cases, the payment will also be arranged by the lawyer or conveyancer who is acting on your behalf. 

Why is stamp duty so expensive? 

Discussions about stamp duty can get surprisingly heated. Some people see it as an outdated tax that makes buying a home way too difficult. Others view it as a necessary evil that keeps the property market from overheating. 

It’s also tricky to pin down why it’s so expensive. But one big reason is that it brings in a considerable amount of state revenue. For instance, let’s look at the 2021-2022 financial year, where stamp duty raised $10 billion dollars in Victoria alone—10% of the total state revenue. 

That revenue then funds things like access to health care, transport infrastructure and education facilities. Of course, some have argued that replacing stamp duty with land tax might be more effective. But, for the foreseeable future, stamp duty will remain in force for most residential properties. 

Can I add stamp duty to my home loan? 

Not as a general rule. Since stamp duty is an upfront cost, something you pay during the settlement, you’ll need to budget for it in addition to your home deposit. Or talk to your lender to see if they can cover stamp duty by increasing the size of your home loan. 

For this reason, you’ll want to consider how much of your money you’ll need to set towards the home deposit and the stamp duty. Just be aware that if you put down less than 20% of the property’s value for a home deposit, you’ll end up paying lenders mortgage insurance—which will usually set you back a few thousand dollars. 

A lower deposit will also usually mean higher repayments on your mortgage. So there’s definitely a trade-off between scaling back your deposit to pay your stamp duty. 

Where can I find and compare home loans? 

We’ve got you covered here. At iSelect, we’ve partnered with Lendi to make it easier to find a great deal on your home loan. You can jump online to compare loans from a wide range of providers. 

Get started on comparing home loans today!*

Find a home loan by comparing with iSelect’s trusted partner, Lendi.

*iSelect is the trading name of iSelect Mortgages Pty Ltd (ABN 86 148 217 181). iSelect Mortgages Pty Ltd is a credit representative (Credit Representative 400540) of Lendi Group Distribution Pty Ltd (Australian Credit Licence 246786). iSelect provides a referral to Lendi Pty Ltd, a Credit Representative of Lendi Group Distribution Pty Ltd (Australian Credit License 246786). iSelect Mortgages Pty Ltd receives a commission from Lendi Group Distribution Pty Ltd, the licensee for each new customer account created and for each home loan submitted through this service.