What is stamp duty? A guide to stamp duty in New South Wales

What is Stamp Duty?

Stamp duty, or transfer duty as it’s known in NSW, is a once-off government tax on buying property payed by the purchaser. It is based on the purchase price and calculated via a scale, in a similar manner to income tax.

However, these standard rates don’t apply to all property purchases, particularly first home owners and foreign buyers.

Pictured below is a full tabulation of how transfer duty is calculated in NSW.

When to pay Transfer Duty

You must pay transfer duty within three months of signing a contract for sale or transfer, except in the case of off-the-plan purchases.

If you buy off-the-plan and you intend to live in the property, you may be able to defer your transfer duty liability for up to 12 months.

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Recent Stamp Duty News

Recently the New South Wales Government announced it would provide duty and land tax incentives for qualifying "build-to-rent projects". 

The incentives include, an exemption from "surcharge purchaser duty" (the foreign investor duty surcharge on residential property).

The concessions are offered for a maximum period of 20 years, expiring in 2040.

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Stamp Duty exemptions

The NSW government’s current policy as of 2017 is the complete exemption of stamp duty for first home owners purchasing a property valued at up to $650,000. A saving of up to $24,470 for first home buyers.

For first home buyers purchasing a home valued between $650,001 and $850,000 a concessional rate of stamp duty applies.

Unlike the NSW First Home Owner Grants (FHOG), the stamp duty concession and exemption apply to all property types.

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Check out the NSW Government Website more information on NSW Transfer Duty