Stamp Duty

Plain-English definition. Stamp duty (officially "transfer duty" in most states) is the state government tax payable when ownership of land or property is transferred. It's typically the largest single upfront cost after the deposit.

How it works in Australia. Each state administers its own scale, generally a sliding marginal rate that climbs to 5–7% above $1m. NSW: ranges from 1.25% on the first $17k to 7% above $3.7m, with first home buyer concessions (full exemption to $800k, partial to $1m). Victoria: 1.4% to 6.5%, with FHB exemption to $600k and partial to $750k. Queensland: 1.5% to 5.75%, FHB full exemption to $700k. Foreign purchaser surcharges apply on top: 8–9% in NSW/VIC. Off-the-plan concessions exist in some states. Duty is payable typically within 30 days of settlement (3 months in NSW). Stamp duty forms part of the cost base for CGT purposes.

Concrete example. Non-first-home buyer purchasing an $800,000 established home in NSW pays approximately $31,000 in stamp duty plus $171 transfer registration fee. The same property bought by a first home buyer occupier under $800k? $0 — full exemption. In Victoria a $750,000 PPR purchase by a non-FHB attracts about $40,070; an FHB buying at $730k pays around $14,000 (partial concession). Foreign buyer of $800k in NSW: $31,000 + 9% surcharge ($72,000) = $103,000+.

Common confusion. Buyers underestimate stamp duty when budgeting. On a $1m purchase in Sydney or Melbourne, expect $40k–$55k of duty — that's deposit-sized. It also doesn't apply to gifted property (still triggers duty in most states) or transfers between spouses in some scenarios.