What is a Stamp Duty?

by satish

Jul 12, 2023

Stamp duty is a tax levied on certain legal documents to make them valid. The most common stamp duty is charged on property transactions, such as selling a house or land. Stamp duty is also charged on other legal documents, such as leases, mortgages, and transfers of shares. In some jurisdictions, stamp duty is a transfer tax or registration fee.

The stamp duty payable depends on the value of the property being transferred. It is collected by the Office of State Revenue and funds various government services and programs. This blog pertains to the. stamp duty concession in NSW and what it entails.

How Much is Stamp (Transfer) Duty in New South Wales?

The amount of stamp duty payable on a document depends on the document type and the value of the documented property or transaction. The stamp duty rates applicable in New South Wales from July 2022 are tabulated below:

Property Value Stamp Duty Rate
Up to $15,000 $1.25 for every $100 (minimum $10)
$15,000 to $32,000 $187 + $1.50 for every $100 over $15,000
$32,000 to $87,000 $442 + $1.75 for every $100 over $32,000
$87,000 to $327,000 $1405 + $3.50 for every $100 over $87,000
$327,000 to $1,089,000 $9,805 + $4.50 for every $100 over $327,000
Above $1,089,000 $44,095 + $5.50 for every $100 over $1,089,000

When to Pay Transfer Duty?

An individual residing in New South Wales (NSW) has to pay transfer (stamp) duty in the following cases:

  • If an individual buys a property, investment property, vacant land, farming land, commercial property, industrial property, or a business that includes a land
  • If an individual acquires land or interest in the land/property without buying the same.

How to Calculate Stamp (Transfer) Duty in New South Wales?

You need to know a few things to calculate New South Wales (NSW) stamp duty.

  • First, you need to know the dutiable value of the property. This is the total value of the property, including any improvements made.
  • Next, you need to know the applicable duty rate. This will depend on the type of property you buy and your circumstances.
  • Finally, you need to calculate the stamp duty payable.

Stamp (transfer) duty is paid based on the property’s sale price or market value (whichever is higher). The standard and premium stamp duty are charged on residential properties worth more than $3 million.

Additionally, the Sydney Customer Price Index (CPI) annually renews the threshold amount. However, if the buyer and seller are related or if the seller is not transferring the whole property, in that case, a qualified individual must visit and value the property.

Stamp (Transfer) Duty Exemptions to First Home Buyers

Legislative consent was issued to the Property Tax (First Home Buyer Choice) Act 2022 on November 11, 2022. Buying a first home now allows first-time buyers to choose between paying stamp duty on the initial sale and annual property tax. The Revenue NSW website offers a refund facility after January 16, 2023, available to eligible first-home buyers during the transition period.

To be eligible for the first home buyer stamp duty exemption, an individual must meet the prerequisites laid down by the government:

  • An individual must be buying or building their first home
  • The property (inclusive with land) must be valued at less than $750,000

The NSW Government offers a range of stamp duty exemptions and concessions for first home buyers. If you're a first home buyer purchasing a property in NSW, you may be eligible for a full or partial exemption from paying stamp duty.  You can visit the Revenue NSW site to learn more about thresholds, exemptions and how to contact your state office.  First-home buyers may also receive stamp duty concessions in NSW for

  • New homes valued between $650,000 and $800,000
  • vacant land valued between $350,000 and $450,000When is the stamp duty exempted in NSW?

An individual is eligible for stamp duty exemptions or concessions in the following cases:

  • In the event of being a beneficiary of a deceased estate
  • In the event of transfer between a married couple or de facto couple.

Frequently Asked Questions

Who pays the stamp duty in NSW?

In the Australian state of New South Wales, stamp duty is a tax imposed on various legal documents.  The stamp duty is paid by the person responsible for the document, usually the buyer or seller of the property.

When do you pay stamp duty in NSW?

When you buy a property in NSW, you must pay stamp duty within three months of the settlement date. Stamp duty is a tax levied by the state government and payable on all property transactions in NSW.

When do you pay stamp duty on an off-the-plan purchase?

Stamp duty is payable on property purchases made off-the-plan within three months after the completion of the agreement or three months after the contract of sale has been allocated.

What if I buy a property below the value?

‘favourable purchase’ is where you purchase a property below its market value. One of the potential drawbacks of such transactions is that stamp duty should be paid on valuation, not purchase price.


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