Stamp Duty in New South Wales

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 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.

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.

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.