Stamp Duty NSW

Stamp Duty Calculator NSW

What is transfer duty?

Transfer duty, also known as “stamp duty”, is (sadly) one of the many expenses that come with buying a property in Australia. As much as we’d all like to pretend this tax doesn’t exist, you’re better off acknowledging it now, so you can budget for it in the long run. The rates of stamp duty vary between state and property type and are affected by a number of other factors. In this article, we focus on NSW. So, if you’re looking to buy a home in a different state, jump over to the relevant article here: VIC, QLD, SA.

Your stamp duty payment helps fund various state-funded public sectors, such as Education and Training, Health and Roads, Transport and Emergency Services.

How is Transfer Duty calculated in NSW?

In NSW, transfer duty is calculated based on the property’s sale price or its current market value, whichever is higher. Each year the threshold amounts for standard transfer duty and premium duty are adjusted with the Consumer Price Index (CPI). A couple of things to note when you’re calculating your transfer duty:

• If you’re buying a residential property worth more than $3 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’ll have to engage an independent, suitably qualified person to value the property.

Good news is, you can use our transfer duty calculator to get an estimate on the fees you’ll be required to pay.

How do I use the transfer duty calculator?

Our Stamp Duty calculator can help you work out what transfer duty you would owe on a property in NSW. All you have to do is fill in the following bits of information and it’ll do all the hard work for you!

1. The purchase price of the property. Transfer duty rates are based on a sliding scale of taxation, so usually the higher the price, the higher the stamp duty rate.
2. The state or territory you’re in. That’s an easy one.
3. The purpose of your property, so if you’re planning on living it or if it’s an investment property.
4. The property type: existing home, new home, or vacant land.
5. And whether you’re a first home buyer or not.

What will the transfer duty calculator tell me?

So, once you’ve entered in all your info, the calculator will give you a breakdown of the results, including:

• The estimated stamp duty, which means your transfer duty.
• The mortgage registration fee, which you’ll have to pay when you register for a home loan.
• Transfer fee, which you’ll have to pay when you transfer a property into your ownership.
• And the title search fee.

Here’s an example of what the results might look like on a $500,000 dollar home for a non-first home buyer in NSW:

When will I likely have to pay transfer duty?

You’ll typically have to pay stamp duty when you buy one of the following in Australia:

• A home property, whether it’s a home or 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 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.

Exemptions and concessions: am I eligible?

The NSW government has made some recent changes to encourage new homeowners to get on the property ladder. So, it’s worth checking whether you’re eligible for an exemption or concession on transfer duty.

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 following qualification criteria, which includes, but is not limited to, the following:

1. You are buying your first home in Australia, as an Australian permanent resident or citizen and are over the age of 18.
2. Full exemption applies if the property is valued at no more than $800,000 for new homes or $650,000 for existing homes. You may be eligible for a concession when purchasing a new home valued between $800,000 and $1 million, or an existing home valued between $650,000 and $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’re purchasing a newly constructed property or a property bought off the plan.

You may also eligible for a concession or exemption from Transfer Duty for the following:

• When you are a beneficiary of a deceased estate.
• The transfer is between a married couple or de facto couple.

When do I have to pay transfer duty in NSW?

You have to pay transfer duty within 3 months of signing a contract for sale or transfer. If you buy off-the-plan and you plan on living in the property you might be able to defer transfer duty for up to 12 months.

How do I pay my Transfer Duty?

If you’re using a solicitor or conveyancer, they’ll usually lodge an application on your behalf and arrange for the duty to be paid. This is typically done as part of the settlement process. If you’re not using a solicitor or conveyancer, you can lodge an application and pay duty on the NSW website here.

Do foreign buyers have to pay transfer duty?

If you want to buy a home in NSW, but you’re not an Australian resident or citizen, you’ll likely have to pay transfer duty with an additional surcharge. The surcharge is 8% of the value of the property you buy and is charged in addition to any applicable transfer duty.

How is stamp duty changing in NSW?

You may have heard the news that stamp duty is set to be phased out in NSW in late 2021. Instead of having to pay thousands in up-front stamp duty costs, property buyers will have the option to pay a smaller annual property tax. In the proposed model, investors are likely to pay a higher tax rate than owner occupiers.

This change could remove a major financial obstacle for prospective home owners, but it could end up costing homeowners more in the long run.

For buyers planning to purchase a property from late 2021, this is an important issue to consider. If you pay stamp duty, it’s a substantial up-front cost, but it’s paid one time only per property. If you opt for the property tax, you’ll have an ongoing cost for the duration of your property ownership.

How do I compare home loans?

If you’re buying a home in NSW, you may also be on the hunt for a home loan provider. Our team at iSelect have partnered with Lendi*, so we can help you compare a range of different providers on the market. Use our online tool to compare home loans, or give Lendi a call on 1300 186 260 (08:30-18:30).

Last updated: 19/04/2021

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