State by state guide to stamp duty in Australia

NSW renamed it transfer duty but most of us know it as stamp duty, and it’s a hot button topic. When housing affordability or tax reform attracts public debate, talk of abolishing state taxes on buying a home is not far behind.

The latest round of debate was in July this year, when the NSW government released a year-long review into federal-state financial relations. A key finding was to increase the good and services tax (GST) above its current rate of 10 per cent and abolish stamp duty.

Even if the recommendation was adopted it doesn’t mean property would drop off the tax radar. The recommendation from the report, chaired by former Telstra chief executive, David Thodey, was to replace transfer fees with a broad-based land tax.

But its early days in any reform process, and for the foreseeable future home buyers will have to deal with the current stamp duty system.

Whether you’re an investor or pending homeowner there are many nuances to the tax, depending on which state you are purchasing property.

Like income tax, stamp duty rises as the value of the property increases. At the lower tiers you pay the lower rate but as you pass thresholds any valuation above that threshold is taxed at the higher rate. The upfront payment paid depends on the final tier you fall under, you do not pay each tiers upfront fee before the percentage fee is applied.

Here are the key parts of each states and territories tax on property.

Standard exemptions and concessions

Who pays: Anyone buying or being gifted a property. In addition to residential, it also covers the purchase of a business that includes land, commercial and industrial properties and vacant land or farming properties.

Exemptions:

  • Inheriting a property from a deceased estate.
  • Married and de-facto couples can equally divide ownership of a family home or land intended for a family home without paying transfer duty.
  • In the case of a divorce/breakup, exemptions apply if the relationship property is transferred to one of the relationship partners or the children of either party.

What you pay: Each state also has special circumstances for tax exemptions or reductions, such as for first home buyers or those impacted by coronavirus or bushfire. Check state government websites for details.

NSW

  • Ranges between 1.25% to 7%, depending on the price of the property.
  • Most will pay $9,285 plus 4.5% on amounts over $310,000. For property over $1.03 million you pay $41,820 plus 5.5% for amounts exceeding the threshold.
  • Finally, if your property is valued at over $3.1 million you pay $155,560 plus 7% for amounts over the threshold.
  • Foreign buyers also get hit with an 8% surcharge.

Victoria

  • A more simple system with variations between 1.4% and 6 per cent.
  • The majority of property purchases will be subject to a $2,970 fee plus 6% for amounts above $130,000.
  • More expensive properties are subject to a flat 5.5% value tax above $960,000.
  • Foreign buyers pay an 8% surcharge

Queensland

  • There are three tiers that cover most buyers. The first kicks in at $75,000 and goes up to $540,000. Buyers pay tax of $1,050 plus 3.5% on amounts over the threshold.
  • It rises to 4.5% for amounts above $540,000 but below $1 million, and anything above that attracts a rate of 5.75%.
  • Foreign buyers pay a surcharge of 7%.

South Australia

  • The state has a lot of tiers in the lower bands but most will fall under the last two. For property values between #300,001 to $500,000 the stamp duty payable is $11,330 plus 5%.
  • Over $500,000 it ratchets up to 5.5% plus $21,330.
  • Foreign buyers pay a surcharge of 7%.

Western Australia

  • The key tiers for WA are between $250,001 and $500,000 and above $500,000. For the former there is a $7,790 fee plus 4.75% for amounts between the band.
  • At the top tier additional valuations attract an upfront payment of $28,453 plus 5.15%.
  • Foreign buyers pay a surcharge of 7%.

Tasmania

  • There are three key bands for the island state. Between $200,000 and up to $375,000 its $5,935 plus 4%.
  • Above that but below $725,000 its $12,935 plus 4.25%.
  • The top tier is $27,810 plus 4.5%

Northern Territory

  • The territory has a fairly simple structure. Between $525,001 and $3 million its 4.95% of the property value.
  • Above that its 5.75% with a tier cap at $5 million. Anything over $5 million attracts a tax rate of 5.95%.
  • Foreign buyers pay a surcharge of 8%.

Canberra

  • The seat of government prefers to call it conveyance duty, and there has been a push in recent years to reduce the level of duty, particularly for first home buyers.
  • For commercial properties there is no tax payable on property transfers if it’s valued at less than $1.5 million. Above that there is a flat tax rate of 5.5 per cent.
  • For residential properties it’s a more tiered structure ranging from $4600 plus 3.6% for more value properties, rising to a flat rate of $4.45% for properties valued at over $1.45 million.

How to calculate: 

Before you start reaching for the calculator to find out how much stamp duty you are up for, don’t worry, the hard work has already been done.

Under the transfer duty section of every state and territory government website you will find a calculator to give you the duty owed based on property price. The NSW government calculator will even find the duty owned in other states with a few simple clicks.

Expect stamp duty to stay on the public radar, and for state and territories to keep fiddling with it. Make it part of your due diligence process to check your stamp duty obligations before buying your next property.

*Data collected from the State Revenue Office of each respective state and territory.  

From Citibank

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