Understanding Stamp Duty in Australia: Rates, Exemptions and State-by-State Guide

Stamp duty (formally 'transfer duty') is a state and territory tax on the purchase of property and certain other transactions. It is collected by each state's revenue office - the amounts and rules differ significantly between jurisdictions:

• Constitutional basis: States retained the right to levy stamp duties under the Australian Constitution; it's one of their largest revenue sources after payroll tax
• When it's payable: On the transfer of land, business assets, and certain shares - usually within 30 days of settlement, though this varies by state
• Who pays: The buyer pays stamp duty in all states (except WA where the seller pays transfer costs separately)
• CGT distinction: Stamp duty is a cost of acquisition and is added to the cost base of the property for CGT purposes - it cannot be claimed as a tax deduction on a residential property
• Investment property: For investment properties, stamp duty is capitalised into the cost base and reduces your CGT gain when you sell - it is NOT immediately deductible
• Timing: In all states, transfer duty is assessed on the contract price or market value (whichever is higher) at the date of the contract, not settlement

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NSW uses a sliding scale of transfer duty rates. The current rates (from 1 July 2023) for residential property:

• $0-$17,000: $1.25 per $100 (1.25%)
• $17,001-$35,000: $212.50 + $1.50 per $100 over $17,000
• $35,001-$93,000: $482.50 + $1.75 per $100 over $35,000
• $93,001-$351,000: $1,497.50 + $3.50 per $100 over $93,000
• $351,001-$1,168,000: $10,530 + $4.50 per $100 over $351,000
• Over $1,168,000: $47,295 + $5.50 per $100 over $1,168,000
• Example - $800,000 property: Approximately $31,090 in stamp duty
• NSW First Home Buyer Assistance Scheme: Full exemption for new and existing homes up to $800,000; concessional rate $800,001-$1,000,000; full duty above $1M
• First Home Buyer Choice (now closed to new applicants): NSW piloted a scheme allowing buyers to opt for an annual property tax ($400/yr + 0.3% of land value) instead of upfront stamp duty - it was abolished for contracts from 1 July 2023 for new applicants

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Each state operates its own duty scale. Here are the key rates for the three other largest states as of 2025:

• Victoria - $0-$25,000: 1.4% of dutiable value
• Victoria - $25,001-$130,000: $350 + 2.4% of excess over $25,000
• Victoria - $130,001-$960,000: $2,870 + 6% of excess over $130,000
• Victoria - over $960,000: 5.5% of total dutiable value (flat rate above this threshold)
• VIC First Home Buyer: Exemption for new/established homes up to $600,000; concession $600,001-$750,000
• Queensland - $0-$5,000: Nil
• Queensland - $5,001-$75,000: $1.50 per $100 over $5,000
• Queensland - $75,001-$540,000: $1,050 + $3.50 per $100 over $75,000
• Queensland - $540,001-$1,000,000: $17,325 + $4.50 per $100 over $540,000
• Queensland - over $1,000,000: $38,025 + $5.75 per $100 over $1,000,000
• QLD First Home Concession: Homes valued under $700,000 (owner-occupied); vacant land under $400,000
• Western Australia - $0-$120,000: 1.9% of value
• Western Australia - $120,001-$150,000: $2,280 + 2.85% of excess over $120,000
• Western Australia - $150,001-$360,000: $3,135 + 3.8% of excess over $150,000
• Western Australia - $360,001-$725,000: $11,115 + 4.75% of excess over $360,000
• Western Australia - over $725,000: $28,453 + 5.15% of excess over $725,000
• WA First Home Buyer: Exemption for homes under $430,000; concession $430,001-$530,000

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The remaining states and territories have their own distinct approaches - including the ACT's landmark shift away from stamp duty entirely:

• South Australia - $0-$12,000: $1.00 per $100
• South Australia - $12,001-$30,000: $120 + $2.00 per $100 over $12,000
• South Australia - $30,001-$50,000: $480 + $3.00 per $100 over $30,000
• South Australia - $50,001-$100,000: $1,080 + $3.50 per $100 over $50,000
• South Australia - $100,001-$200,000: $2,830 + $4.00 per $100 over $100,000
• South Australia - $200,001-$250,000: $6,830 + $4.25 per $100 over $200,000
• South Australia - $250,001-$500,000: $8,955 + $4.75 per $100 over $250,000
• South Australia - over $500,000: $20,830 + $5.50 per $100 over $500,000
• SA First Home Buyer: $15,000 grant for new homes (not an exemption from duty)
• ACT Land Tax Transition: The ACT began phasing out stamp duty in 2012 in favour of annual general rates - by 2032, stamp duty will be abolished entirely. In 2025, the ACT still charges duty but at reduced rates with significant first home buyer assistance
• Tasmania: Similar sliding scale structure; first home owner grant of $30,000 for new homes as of 2024-25

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Two important overlays apply in most states regardless of the standard rate schedule:

• Foreign person surcharge - NSW: 8% additional duty on residential property (applies to foreign nationals and some foreign-owned companies)
• Foreign person surcharge - VIC: 8% surcharge for foreign purchasers of residential property; also a 2% absentee owner surcharge on land tax annually
• Foreign person surcharge - QLD: 7% additional duty for foreign purchasers
• Foreign person surcharge - WA: 7% surcharge introduced from January 2019
• Foreign person surcharge - SA: 7% surcharge for foreign purchasers
• FIRB approval requirement: Foreign nationals generally need FIRB approval before purchasing established residential property in Australia (new property exempt from FIRB but not from state surcharges)
• Off-the-plan concessions: Most states offer some concession for purchasing off-the-plan - duty is typically assessed on the land value only (not the completed construction value) or on a reduced dutiable value
• NSW off-the-plan: Duty is assessed on the land value until the building is complete; for owner-occupiers this can mean substantial savings
• VIC off-the-plan concession: Available for properties up to $1 million for owner-occupiers who haven't previously owned property - reduces dutiable value by deducting the construction portion
• Warning: Off-the-plan concessions in VIC were significantly tightened in 2023-24; always verify current thresholds with the State Revenue Office

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Economists have long argued that stamp duty is an inefficient tax - it discourages people from moving to appropriately sized homes and reduces housing market mobility. The policy debate is accelerating:

• The efficiency argument: A $30,000 stamp duty bill effectively locks people into a home for a decade just to break even on transaction costs - this reduces labour market mobility and prevents empty nesters from downsizing
• ACT model: The ACT is the only jurisdiction to have committed to full abolition; after 20+ years the transition is nearing completion - annual general rates now fund what stamp duty once did
• NSW experiment and reversal: NSW's First Home Buyer Choice pilot ran for 12 months (2022-2023) before being discontinued by the incoming Labor government - early data suggested around 15% of eligible buyers opted for annual land tax over upfront duty
• Henry Tax Review: Ken Henry's 2010 tax review recommended replacing stamp duty with a broad-based land value tax nationally - successive governments have resisted due to the transition cost
• Victoria 2023-24 budget: Introduced a Short Stay Levy (7.5% of revenue) targeting Airbnb-style properties - not stamp duty reform but signals growing appetite for land-value-based taxes
• The transition problem: Moving from stamp duty to land tax creates double-taxation for existing owners (they paid stamp duty and would then pay land tax) - the ACT solved this with a 20-year phase-in
• Likely trajectory: Incremental expansion of first home buyer exemptions and off-the-plan concessions is more politically achievable than wholesale replacement - expect the status quo to persist in most states through 2030

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