What is stamp duty and how is it calculated? - NAB
What is stamp duty?
Stamp duty at a glance
- Stamp duty (also called transfer duty) is a one-off charge when property ownership changes hands.
- It’s generally paid by the buyer to the state or territory government where the property is, through its revenue office.
- The payment is usually around settlement, on top of the deposit.
- Each state and territory sets its own rates and rules, so what you pay depends on where you buy.
- Typically, the higher the property’s value, the more duty you’ll pay.
- Some buyers may be eligible for an exemption or concession. Check with your state or territory revenue office.
Stamp duty explained
What is stamp duty?
It’s a one-off tax charged by state and territory governments when the ownership of a property or land is transferred. It applies whether you’re buying a home to live in or to invest. It also applies to property you receive as a gift or through a trust.
The name comes from the days when a physical stamp was put on property documents to show the tax had been paid.
Why is stamp duty charged?
It’s a tax on the legal transfer of ownership, collected through each state or territory’s revenue office and is generally paid by the property buyer. It’s separate from the purchase price, so it isn’t paid to the seller, the real estate agent, or your lender.
Stamp duty by another name
Depending on where you are, you might see it called something different. They all refer to the same type of charge on property purchases. Common terms include transfer duty, duty, land transfer duty or conveyance duty. Your revenue office’s website will use its official term.
How is stamp duty calculated?
Duty is worked out using a few basic steps, and a conveyancer or solicitor can help you understand the amount. Rates and rules differ by state and territory, but the steps are similar.
1. The dutiable value is set. This is generally the purchase price or the property's market value, whichever is higher. It can be worked out differently in some situations, such as gifts or off-the-plan purchases.
2. The rates are applied. Many revenue offices charge each slice of the value at a different rate, so duty rises as the price rises. Others use a formula or apply one rate to the whole value in certain price ranges.
3. Your situation is considered. Exemptions, concessions and surcharges can change the final figure.
To estimate your own amount, use our stamp duty calculator.
What affects the amount you pay
Two buyers can pay different amounts, even for the same price. These are the main factors.
| Factor | How it can affect your duty |
|---|---|
| State or territory | How it can affect your duty The same price can attract different duty in different places. |
| Property value | How it can affect your duty The dutiable value is what the rates are applied to. |
| Type of property | How it can affect your duty Established homes, new homes, vacant land and off-the-plan purchases may be treated differently. |
| How you’ll use it | How it can affect your duty Living in the property or investing in it can attract different treatment. |
| Your circumstances | How it can affect your duty Your situation, such as being a first home buyer, may affect whether you’re eligible for an exemption or concession. |
| Surcharges | How it can affect your duty Extra duty may apply in some situations, such as for foreign purchasers. |
Duty isn’t the only government charge when you buy. Others can include fees to transfer the title and to register your mortgage. These costs are separate from stamp duty and vary by state and territory.
When and how do you pay stamp duty?
Your stamp duty is generally paid at settlement. The exact process varies depending on where the property is located. It usually involves a direct deposit, bank transfer, or cheque. It’s common for your solicitor or conveyancer to organise the funds on your behalf on settlement day.
Payment deadlines can differ between states and territories. Meeting yours is important. A late payment can attract penalties, including fines and additional interest charges. Check your deadline in advance.
Stamp duty exemptions and concessions: what’s the difference?
- Exemption: you may pay no stamp duty (if you’re eligible).
- Concession: you may pay a reduced amount of stamp duty (if you’re eligible).
Eligibility, thresholds, and savings vary by state and territory.
What exemptions or concessions might you be eligible for?
First home buyer exemptions and concessions
Many states and territories offer first home buyers an exemption or concession. The criteria can vary, and can include:
- whether you’ve owned property before
- your residency status
- whether you’ll live in the home, and when you’ll move in
- the value of the property
- whether the home is new or established.
You may also be eligible for the First Home Owner Grant (FHOG) and the Australian Government 5% Deposit Scheme alongside any stamp duty savings.
New builds, vacant land and off-the-plan purchases
- Building a new home: If you buy a block of land and build on it, you’ll usually pay duty on the value of the land, not on the cost of building the home.
- Off-the-plan: You’re buying before the property is built, which can come with stamp duty concessions. In some states, duty is based on the sale price minus the cost of construction still to be done after the contract date.
Buying a home to live in (owner-occupier)
Some states and territories may charge lower duty if the property will be your main home. Unlike first home buyer schemes, this may apply even if you've owned property before.
Check exemptions in your state or territory
Find out how transfer duty applies where you’re buying and whether you qualify for any exemptions or concessions.
Stamp duty can often be a complicated topic to navigate so if you’re unsure about anything, your conveyancer, solicitor or banker can help to answer questions you might have.
Frequently asked questions
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As an upfront cost, it isn’t included in your home loan. Your lender may let you borrow extra to cover it, depending on your deposit size, borrowing power and eligibility. Adding it to your loan means you’ll pay more interest over the life of your home loan.
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Stamp duty is a state government charge and not a NAB fee. It’s collected at settlement on behalf of the state or territory revenue office.
How to find out if you qualify
How to plan for stamp duty when buying property
Stamp duty can be one of your biggest upfront costs outside your deposit. Planning for it early makes it less likely to catch you off guard.
A simple way to think about your savings goal: deposit (plus) stamp duty (plus) other buying costs.
- Test a few prices. Duty rises with the price, so estimating a range gives you a more realistic target than a single figure.
- Check for concessions early. Whether you might be eligible for an exemption or concession can change how much you need to save.
- Allow for the other costs. Legal fees, inspections and government fees are paid on top of stamp duty. Our upfront costs guide covers them.
- Leave some breathing room. If the price you end up paying is higher than planned, your duty will be too. Keeping a buffer makes that easier to manage.
For ideas on building your savings, see our guide to saving for a house deposit.
Ready to purchase your home?
Talk to our home loan experts today.
Other home and property guides
Understanding the loan to value ratio (LVR)
We explain how Loan-to-Value Ratio works. Read more.
How much do you need for a house deposit
Tips to help you save a deposit for a home loan.
First home buyer’s guide
Our easy step-by-step guide to buying your first home.
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The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.