Stamp Duty In NSW: How it works and how much you could have to pay

Also known as “transfer duty”, stamp duty is one of many expenses that come with buying a property in Australia. The rates of stamp duty vary between state and property type – and are affected by a number of other factors. When you’re budgeting to buy a property, it pays to be prepared for how much stamp duty you may have to pay. That way, there are less likely to be any nasty surprises along the way that could put a big hole in your budget.

Since the rules vary between states, we’re going to focus on transfer duties in NSW. This article from iSelect was made to help you calculate the stamp duty you can expect to pay, and fill in some other details on the subject, such as potential exemption eligibility and stamp duty for foreign buyers. Keep reading to ensure you’re in-the-know.

This calculator is currently offline, but will be returning soon! In the meantime you can learn more about Stamp Duty information for New South Wales here: https://www.revenue.nsw.gov.au/

When will you have to pay stamp duty?

There are a number of circumstances in NSW that require a stamp duty payment¹. When you buy any of the following, this will incur a transfer duty cost:

• A property to live, whether it’s a home or a holiday home
• An investment property
• Vacant land or a farming property
• A commercial or industrial property
• A business that includes the purchase of land

If you happen to acquire land or an interest in land, without buying it, you may also need to pay transfer duty. Examples can include:

• A declaration of trust
• A gift
• A transaction that leads to a change in the beneficial ownership of a property

Calculating stamp duty in NSW

In NSW, stamp duty is calculated depending on the value of the property. Below is the list of standard NSW stamp duty rates (as updated in July 2019)¹. Remember that these standard rates don’t apply to all property purchases and can vary depending on some other circumstances, such as first home and foreign buyers.

Property Value	Rate of duty
$0-$14,000	$1.25 for every $100 or part of the dutiable value
$14,001-$30,000	$175 plus $1.50 for every $100 or part, by which the dutiable value exceeds $14,000
$30,001-$81,000	$415 plus $1.75 for every $100 or part, by which the dutiable value exceeds $30,000
$81,001-$304,000	$1,307 plus $3.50 for every $100 or part, by which the dutiable value exceeds $81,000
$304,001-$1,013,000	$9,112 plus $4.50 for every $100 or part, by which the dutiable value exceeds $304,000
over $1,013,000	$41,017 plus $5.50 for every $100 or part, by which the dutiable value exceeds $1,013,000
over $3,040,000	$152,502 plus $7.00 for every $100 or part, by which the dutiable value of the residential property exceeds $3,040,000.

For a stamp duty estimation based on a predicted purchase price, you can use our Stamp Duty Calculator.

It’s important to keep in mind that:

• If you’re buying a residential property that’s worth more than $3.04 million, you’ll be charged a standard transfer duty rate as well as a premium duty rate
• If you’re buying a property and are somehow related to or associated with the seller, you will have to engage an independent, suitably qualified person to value the property

Exemptions and concessions: Are you eligible?

The NSW government has made some changes to transfer duty rules, as a way to encourage new homeowners and help them get onto the property ladder. As a first home buyer in the state, you could be eligible for full or partial exclusion from transfer duty payment, as long as you meet the qualification criteria which includes but is not limited to²:

1. You are buying your first home in Australia, be an Australian permanent resident or citizen and over the age of 18
2. The property is valued at no more than $800,000
3.  You must occupy the property within 12 months of completing the purchase and live there for at least 6 consecutive months

This exemption applies to more buyers than the NSW First Home Owner Grant (FHOG), which offers a grant to first time buyers if they are purchasing a newly constructed property or a property bought off the plan³.

Stamp duty for foreign buyers

While first home buyers are often exempt from paying stamp duty or receiving stamp duty concessions, this is not the case for foreign buyers. If you want to buy a home in NSW but are not an Australian resident or citizen, you’ll be obliged to pay an additional stamp duty surcharge⁴.

At July 2019, this surcharge is 8% of the value of the property you buy and is charged in addition to any applicable transfer duty.

Whatever stage you’re at, buying a property is a huge financial commitment, so it helps to have support behind you.

iSelect is not currently offering a Home Loan comparison.

Sources:
1. https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/transfer-duty
2. https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer
3. https://www.revenue.nsw.gov.au/grants-schemes/previous-schemes/first-home-owner-grant
4. https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/transfer-duty/surcharge-purchaser-duty