What Is Stamp Duty in Australia? A Plain-English Guide for Buyers

Quick Answer

Stamp duty (also called transfer duty) is a state government tax you pay when you buy property. It is calculated as a percentage of the purchase price or market value, whichever is higher. The amount varies by state and territory, and first-home buyers may be eligible for concessions or exemptions up to certain price thresholds.

What Is Stamp Duty?

Stamp duty is one of the largest upfront costs of buying property, yet many buyers underestimate it or forget to budget for it until they are deep in the process. Unlike your deposit, stamp duty cannot be added to your mortgage in most cases — you need to have this money ready at settlement.

The name "stamp duty" comes from the old practice of physically stamping documents to confirm a tax had been paid. The tax is still alive and well, though the stamp has long since gone digital.

How Is Stamp Duty Calculated?

Each state and territory sets its own rates, thresholds and concessions. Rates are tiered — the more you pay for a property, the higher the percentage that applies to the upper portion of the price.

Here is a rough guide to how stamp duty adds up at different price points (these are approximate figures and can change — always verify with your state revenue office or conveyancer):

$500,000: Approximately $17,000–$21,000 depending on state
$750,000: Approximately $28,000–$40,000 depending on state
$1,000,000: Approximately $40,000–$55,000 depending on state

NSW, Victoria and Queensland have historically had higher rates than South Australia and Western Australia at comparable price points. The ACT has moved toward a land tax model and has reduced its upfront duty significantly.

Always use your state's official stamp duty calculator to get an accurate figure for your purchase.

First Home Buyer Concessions

Most states offer stamp duty concessions or full exemptions for eligible first-home buyers. The thresholds and conditions vary:

NSW: Full exemption up to $800,000, concessional rates up to $1,000,000 (as at 2026). Buyers must move in as their principal place of residence.
Victoria: Full exemption up to $600,000, reducing concession up to $750,000. Must be a principal place of residence.
Queensland: Concession available for first-home buyers on properties up to $550,000.
Western Australia: Concession for first-home buyers on vacant land up to $400,000 and established homes up to $430,000.
South Australia: No general first-home buyer stamp duty concession, but the First Home Owner Grant may apply.

These thresholds are updated periodically. Confirm the current rules with your state's revenue authority or your conveyancer before making a purchase decision based on them.

When Do You Pay Stamp Duty?

Stamp duty is generally due at settlement — the same day you take legal ownership of the property. In some states you have a short window after settlement to pay, but your conveyancer will typically arrange it as part of the settlement process.

Some lenders will factor stamp duty into their loan approval process to confirm you have sufficient funds to complete, but they will not pay it for you.

Stamp Duty on Investment Properties

If you are buying an investment property rather than a home to live in, you are not entitled to first-home buyer concessions. Full stamp duty rates apply regardless of whether you already own property.

Foreign buyers face additional surcharges in most states. These are substantial — often 7–8% on top of standard rates — and apply to foreign citizens and some temporary visa holders.

Realistic Example

James is buying his first home in Melbourne for $620,000. He qualifies for the first-home buyer concession in Victoria. Without any concession, stamp duty on $620,000 would be around $33,000. With the concession, his stamp duty is significantly reduced. His conveyancer calculates the exact amount and includes it in the settlement figures.

James had budgeted $35,000 for stamp duty just in case, which turned out to be more than he needed. Having a buffer was smart — he used the remainder toward moving costs and immediate repairs.

Checklist: Managing Stamp Duty

Calculate your estimated stamp duty using your state's official online calculator
Check whether you qualify for a first-home buyer concession or exemption
Confirm the current thresholds — they change periodically
Set aside stamp duty funds in a separate account from your deposit
Ask your conveyancer to confirm the exact amount before exchange
Budget for stamp duty as cash — you generally cannot add it to your home loan
If buying interstate, check that state's rules separately — each state is different

Key Takeaways

Stamp duty is a state government tax due at settlement, calculated on the purchase price
Rates are tiered and vary significantly between states and territories
First-home buyers may qualify for concessions or full exemptions up to certain price thresholds
You generally need stamp duty as cash, separate from your deposit
Always confirm the current rules with your state revenue office or conveyancer

FAQ

Can stamp duty be added to my home loan? Generally no. Most lenders require stamp duty to be paid from your own funds at settlement, separate from the loan. A small number of lenders may allow it to be capitalised in limited circumstances — ask your broker.

Do I pay stamp duty on a new build or house-and-land package? This depends on the state. In some cases, stamp duty applies only to the land component, not the construction contract. In others, it applies to the completed property value. Your conveyancer can advise on your specific situation.

Is stamp duty tax deductible? For a home you live in, no. For an investment property, stamp duty forms part of the cost base for capital gains tax purposes but is not immediately deductible in the year of purchase. Speak with your accountant for your specific situation.

What if the property price changes after exchange? Stamp duty is generally calculated on the purchase price stated in the contract. If the contract price changes (rare), your stamp duty obligation may change accordingly.

Run a Free Property Analysis on Marketli

Knowing your stamp duty obligation upfront helps you set a realistic purchase price target. Use Marketli to research suburbs and properties within your all-in budget — including stamp duty — before you start making offers.