What is stamp duty in NSW and who needs to pay it?
When you purchase a property in Australia you may have heard of paying stamp duty. Stamp duty is a one-time government tax that must be paid when purchasing certain other assets, including real estate.
To find out more about stamp duty rates, how to calculate them, and if you could qualify for a stamp duty tax exemption, keep reading.
In this blog, you will find
- What Is Stamp Duty in NSW?
- Who Needs to Pay Stamp Duty?
- Residential Property Stamp Duty Rates
- About the new NSW GOV first home buyer scheme
- How to pay Stamp Duty in NSW?
What is Stamp Duty in NSW?
Stamp duty in NSW is a one-time government tax that must be paid when purchasing real estate assets.
This is a mandatory tax that is assessed on a variety of acquisitions, including those for companies and automobiles, but it is most famously recognized as the tax you pay when you acquire real estate. This is the reason it's sometimes called the "Transfer of Land Duty."
Who Needs to Pay Stamp Duty in NSW?
The buyer of the property must pay stamp duty in NSW. Unless they purchase the property personally, the seller is not required to pay any stamp duty.
Stamp duty might be a very unpleasant surprise for a newbie investor. When determining how much you can afford to spend on a house, you must account for stamp duty. Find out exactly how much stamp duty you will have to pay at the beginning to spare yourself any unneeded hardship.
NEW SOUTH WALES stamp duty costs
The entire list of stamp duty costs may be obtained online at the state revenue office. However, the normal rates for properties costing more than $800,000 are as follows.
| Property Value | Stamp Duty Rate |
| $0 to $14,000 | $1.25 for every $100 (the minimum is $10) |
| $14,000 to $32,000 | $175 plus $1.50 for every $100 over $14,000 |
| $32,000 to $85,000 | $445 plus $1.75 for every $100 over $32,000 |
| $85,000 to $319,000 | $1,372 plus $3.50 for every $100 over $85,000 |
| $319,000 to $1,064,000 | $9,562 plus $4.50 for every $100 over $319,000 |
| Over $1,064,000 | $43,087 plus $5.50 for every $100 over $1,064,000 |
Source: 
The market value of the asset is used to determine the duty. Therefore, you will have to pay a greater stamp duty rate the more valuable the property is.
What Are First-Time Home Buyers' Stamp Duty Costs in NSW?
The NSW government's new first-home buyer scheme
First-home buyers will be able to trial a new land tax without strings attached as the state government looks to reform stamp duty.
Right now when you buy a property in NSW you pay one-off stamp duty on the purchase price.
Under the new program, you can choose to instead pay an annual tax of $400 plus 0.3 percent of the land value (not the purchase price).
Example:
Someone buying their first home in Sydney for $830,000 with a land value of $265,000 can choose between an upfront stamp duty of $32,440 or an initial annual property tax of $1,195.
Note: NSW government's first home buyer scheme will start on January 16, 2023.
How to pay Stamp Duty in NSW?
Within three months of the completion of the property transaction, stamp duty is due. On your behalf, your solicitor or conveyancer will file the application for the duties assessment and handle the payment. They normally let you know if you qualify for any concessions or exemptions at this point in the settlement process.
Stamp Duty Exemptions in NSW
You must fulfill a number of requirements in order to be qualified for these concessions and exemptions.
- if you are purchasing property with a partner who has already benefited from the first home buyer scheme, you will not be considered eligible.
- you must also be a person (not a company or trust), over 18 years of age, have permanent residency in Australia (you or your partner) and occupy the dwelling within 12 months of purchasing it, for a period of at least 6 months.
- if the property is being transferred due to the owner being deceased or due to the break up of a marriage or other relationship, or if ownership is being transferred between married or de facto couples.
The Bottom Line
Property purchasers should thus be well informed of the appropriate stamp duty rates and consider how they will effect their transactions and finances in order to stay within their budgets.
At Empower Estate Agents, we take great satisfaction in having a wealth of expertise in concluding successful real estate transactions for both buyers and sellers. We also make ourselves widely accessible to our customers at all times.
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