What stamp duty actually is
It is a state tax on the transfer of property ownership, calculated on the purchase price or the market value of the property, whichever is higher. It is paid by the buyer, not the seller.
Duty is charged on a sliding scale: the higher the value, the higher the marginal rate. On a median-priced capital city house it commonly runs into the tens of thousands of dollars.
When you have to pay it
Deadlines differ by state, but duty is generally payable within 30 to 90 days of contract exchange, and in practice your conveyancer settles it at or before settlement. Lenders will not release funds until duty arrangements are confirmed.
Budget for it as cash. Most lenders will not add stamp duty to the loan, so it comes out of your deposit savings along with legal fees, inspections and lender charges.
First home buyer concessions
Every state and territory offers some relief for first home buyers, usually a full exemption below one price threshold and a reduced rate on a band above it. Thresholds change regularly and are often higher for newly built homes or vacant land than for established houses.
Some jurisdictions also offer a first home owner grant for new builds, and the ACT uses an income-tested scheme instead of a simple threshold. Check the current rules on your state revenue office site the month you buy — these numbers move.
Investors, foreign buyers and second properties
Investment purchases pay full duty with no first home concession. Foreign purchasers pay an additional surcharge on top of standard duty in every state, typically a further seven to eight per cent of the value.
Buying with a partner who has owned property before can disqualify the whole purchase from a first home concession in some states, so check eligibility jointly, not individually.
How to estimate your bill
Every state revenue office publishes a free online duty calculator. Enter the purchase price, the property type and whether you will live in it, and you will get an indicative figure in under a minute.
Add roughly two to three per cent of the purchase price for the other transaction costs — conveyancing, building and pest inspection, loan establishment, registration fees and insurance.