NSW transfer duty, still universally called stamp duty, is charged on a sliding scale that rises with the property price, and it is payable within three months of exchanging contracts. First home buyers pay nothing up to $800,000 and a reduced amount up to $1,000,000. Almost everyone else pays in full, in cash, and it cannot normally be added to the loan.
Duty is the cost that most reliably ambushes buyers, for two reasons: the amount is larger than people expect, and the timing is earlier than people expect. It is worth understanding both before you make an offer.
How the amount is worked out
NSW transfer duty is calculated on a series of brackets. Each slice of the property price attracts a rate, and the rate rises as the price does, so the duty on a $1,500,000 home is more than twice the duty on a $750,000 one. Above a premium threshold a higher top rate applies to the portion above it.
The brackets are indexed and typically reviewed from 1 July each year. Rather than reproduce numbers that will drift out of date, our NSW stamp duty calculator runs the current Revenue NSW brackets and will tell you the exact figure for a given price, including the first home buyer concession where it applies.
Duty is charged on the purchase price or the market value, whichever is higher. Buying from family at a favourable price does not reduce the duty.
When you actually have to pay
This is the part that causes real trouble. Duty is payable within three months of exchanging contracts, not at settlement. On a standard six-week settlement the two land close together and it feels like a settlement cost. On a long settlement — an off-the-plan purchase, or a negotiated delay — the duty can fall due well before you have the keys.
Off-the-plan purchases of a home you will live in may be eligible for a deferral of up to twelve months. That is a genuine cash flow benefit, but it is a deferral, not a discount.
Duty is a cash cost. It is generally not something a lender will add to the loan, because it is not part of the property value. It has to come out of your savings, alongside the deposit.
First home buyers: the exemption and the taper
Under the First Home Buyers Assistance Scheme, an eligible first home buyer pays:
| Purchase price | Duty payable |
|---|---|
| Up to $800,000 | Nothing |
| $800,000 to $1,000,000 | A concessional amount, tapering upward |
| Above $1,000,000 | Full duty |
For vacant land on which you will build, the equivalent thresholds are $350,000 and $450,000.
The taper between $800,000 and $1,000,000 is worth understanding, because it means the saving does not vanish the moment you cross $800,000 — it reduces gradually. It also means that a property just over a threshold can cost noticeably more in total than one just under, which is worth modelling before you bid.
Eligibility rules apply: broadly, you must not have owned residential property in Australia before, and you must move in within a set period and live there for a minimum time. Check the current conditions with Revenue NSW.
The surcharge for foreign purchasers
Foreign persons buying residential property in NSW pay a surcharge purchaser duty on top of the standard duty, and may also face an annual land tax surcharge. The definition of a foreign person is broader than people assume and can capture certain temporary visa holders, trusts and companies with foreign interests.
If there is any foreign interest in the buying entity, get this checked before you exchange. It is a large number and it is not negotiable afterwards.
Other situations where duty changes
- Transfers between spouses of a principal place of residence can be exempt in defined circumstances.
- Deceased estates transferring under a will are generally treated concessionally.
- Off-the-plan purchases may allow deferral, as above.
- Buying an investment property attracts no first home concession, even if it is your first purchase, because the concessions require you to live in it.
Duty in other states works differently again. If you are buying interstate, the Victorian and Queensland calculators run those rules rather than the NSW ones.
Budgeting for it properly
The practical approach is to decide your price range, calculate the duty at the top of that range, and treat that as a fixed line in your savings target rather than something to work out later. On a purchase near $1,000,000 without a concession, duty is a very substantial sum and it is the difference between settling comfortably and scrambling.
The purchase costs calculator combines duty with the other upfront costs, which is the number you actually need to have saved.
Common questions
Generally no. Lenders lend against the value of the property, and duty is a government charge rather than part of that value. It has to come from your own funds. Occasionally a buyer with substantial equity elsewhere can structure around it, but for most purchases it is a cash cost.
You pay duty on the land component, and the treatment depends on when you enter the contract and how far construction has progressed. Buying land and building under a separate contract is often treated differently from buying a completed house. It is worth getting this checked before signing, because the difference can be significant.
Not for a home you live in. For an investment property, duty is generally not immediately deductible but forms part of the cost base for capital gains tax purposes when you eventually sell. Confirm with your accountant, as this is a tax question rather than a lending one.
Revenue NSW charges interest and penalties on late payment, and the transfer cannot be registered until duty is paid. It is not a deadline to test.
Usually the test relates to residential property in Australia, but the precise wording matters and it has changed over time. Do not assume either way. Check the current eligibility criteria with Revenue NSW before you count on the exemption.