You can’t be certain of anything in property development; except taxes. It comes in many forms; however, Stamp Duty seems to be a particular cause of confusion and stress for a majority of property purchasers.
In this article, we clear up the clutter and provide the tools (and links) so that you may better understand how much tax you are required to pay, how much concession or exemption you may be entitled to and when you are required to pay it.
What is Stamp Duty?
Stamp duty is a tax levied on property purchases. Each state and territory governs its own rates but the amount payable will be determined by the purchase price, location and purpose. Some states charge different rates on investment properties than on places of residence.
As each state has different fees and exemptions, let’s look at each individually.
New South Wales
A sale or transfer of land, including improvements in NSW will incur a liability known as Transfer Duty (Stamp Duty).
The liability for duty arises, and is payable, from the moment the sale or transfer occurs. However, if the sale or transfer is affected by a written instrument (contract or agreement or transfer), liability arises when the instrument is first executed. Payees need to pay the duty within three months from the date of this liability.
Therefore, if the property is purchased off-the-plan, the transfer duty must be paid within three months from the date of acceptance – normally the signing of the agreement.
EXEMPTION – FIRST HOME BUYER
Purchasers eligible for the First Home Buyers Assistance scheme, may be granted exemptions or concessions on transfer duty. This includes vacant land on which you intend to build your first home.
The First Home Buyers Assistance (FHBA) scheme provides eligible purchasers with exemptions on transfer duty on new and existing homes valued up to $650,000 and concessions on duty for new and existing homes valued between $650,000 and $800,000.
Eligible purchasers buying a vacant block of residential land to build their home on will pay no duty on vacant land valued up to $350,000, and will receive concessions on duty for vacant land valued between $350,000 and $450,000.
For more information on the FHBA scheme, how to apply and how to calculate potential concessions, visit here.
RATES
Current rates and thresholds are outlined in the table below:
| Value of the property subject to the transaction | Rate of duty |
|---|---|
| $0 - $14,000 | $1.25 for every $100 or part of the value |
| $14,001 - $30,000 | $175 plus $1.50 for every $100, that the value exceeds $14,000 |
| $30,001 - $80,000 | $415 plus $1.75 for every $100, that the value exceeds $30,000 |
| $80,001 - $300,000 | $1,290 plus $3.50 for every $100, that the value exceeds $80,000 |
| $300,001 - $1m | $8,990 plus $4.50 for every $100, that the value exceeds $300,000 |
| over $1m | $40,490 plus $5.50 for every $100, that the value exceeds $1,000,000 |
| Premium Property Duty: over $3m | $150,490 plus $7.00 for every $100, that the value exceeds $3,000,000. |
To use the NSW Transfer of Land Calculator – click here.
Exemptions for NSW Transfer duty relating to deceased estates or marriage and other relationships transfer, can be found here.
For more information regarding Transfer Duty in NSW visit the State Revenue website.
Queensland
Stamp Duty is similarly referred to as Transfer Duty in Queensland.
The Office of State Revenue (OSR) in Queensland is part of the Queensland Treasury and is responsible for collecting state taxes and royalties, and administering the Queensland First Home Owners’ Grant.
Generally, purchasers must lodge documents for stamping within 30 days from the date they’re signed. Also, they usually need to have the documents for their transaction stamped and pay any duty charged before the transfer can be complete.
EXEMPTION – FIRST HOME
Eligible purchasers can claim a first home concession for transfer duty when acquiring their first residence, as long as they meet certain requirements.
The first home concession only applies to a home valued under $550,000, however, the home concession may still apply for a home valued over this amount.
More information on the First Home Concession, applications and calculation of potential concessions, are available from this QLD government page.
RATES
When land is purchased in Queensland, the dutiable value is usually either the unencumbered value of the property (usually the market value) or the amount the purchaser agrees to pay (the consideration) for the transaction—whichever is higher.
This means that even if no money is paid for a transaction (e.g. a family member transfers property to you as a gift), the property being transferred still has a dutiable value.
Current rates and thresholds are outlined in the table below:
| Dutiable value | Duty rate |
|---|---|
| Not more than $5,000 | Nil |
| More than $5,000 up to $75,000 | $1.50 for each $100, or part of $100, over $5,000 |
| $75,000 to $540,000 | $1,050 plus $3.50 for each $100, or part of $100, over $75,000 |
| $540,000 to $1,000,000 | $17,325 plus $4.50 for each $100, or part of $100, over $540,000 |
| More than $1,000,000 | $38,025 plus $5.75 for each $100, or part of $100, over $1,000,000 |
To view the QLD Transfer Duty Estimator – click here.
For further information on concessions regarding family transfers or superannuation visit this page.
For more information regarding Transfer Duty in QLD visit this website.
Victoria
Stamp Duty is referred to as Land Transfer Duty in Victoria. The State Revenue Office is responsible for regulating the duties and receiving payments.
Just like Queensland, the amount of land transfer duty required to pay depends on the dutiable value of the purchased property – this is the price paid for the property or its market value, whichever is greater. Duty is calculated on a sliding scale, starting at 1.4 per cent for properties valued at $25,000 and rising to 5.5 per cent for those valued at or above $960,000.
If duty is not paid within 30 days of settlement, penalty tax and interest may apply.
EXEMPTION – FIRST HOME
Purchases or building a new home valued up to $750,000, may be eligible for a First Home Owner Grant (FHOG). Eligible FHOG purchasers buying in regional Victoria, will receive $20,000. If the home is not in regional Victoria, the grant is $10,000.
Eligible for a Land Transfer Duty exemption if may be available if the purchase is nominated as a principle place of residence and valued up to $600,000. Otherwise a concession is available if the PPR has a dutiable value between $600,001 to $750,000.
Find more information on the First Home Buyer Land Transfer Duty concession or exemption here.
EXEMPTION – OFF-THE-PLAN
Duty concessions are also accessible for first-home owner buying an off-the-plan land and building package or a refurbished lot. They must live in the property as their permanent home if a signed contract occurred on or after 1 July 2017.
RATES
Current rates and thresholds are outlined in the table below:
| Dutiable value range | Rate |
|---|---|
| $0 - $25,000 | 1.4 per cent of the dutiable value of the property |
| $25,001 - $130,000 | $350 plus 2.4 per cent of the dutiable value in excess of $25,000 |
| $130,001 - $960,000 | $2870 plus 6 per cent of the dutiable value in excess of $130,000 |
| More than $960,000 | 5.5 per cent of the dutiable value |
To use the VIC Land Transfer Duty Calculator – click here.
A number of exemptions and concessions for land transfer duty are available. Many of these are aimed at homebuyers, but others include: Deceased estates; Transfer between spouse or partner; Family farms; Young farmers; Corporate consolidation; Corporate reconstruction; Charities and friendly societies.
For more information regarding Land Transfer Duty in VIC visit this website.
