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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.
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:
- You are buying your first home in Australia, be an Australian permanent resident or citizen and over the age of 18
- The property is valued at no more than $800,000
- 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.
Compare home loans with iSelect powered by AFG
If you’re in the market to buy a property in New South Wales, whether it’s your first home or an investment property, iSelect powered by AFG can help you prepare. The Stamp Duty Calculator is available to provide an estimation of the stamp duty and some other costs that may apply in addition to the property value, so you can understand fees that may apply to you.
Whatever stage you’re at, buying a property is a huge financial commitment, so it helps to have support behind you. Use our online comparison tool to compare a range of home loan providers in NSW. If you have any further questions or need some advice that relates to your situation, don’t hesitate to give iSelect powered by AFG a call. You can reach the team of brokers on 13 19 20.
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