Stamp Duty Explained

Stamp duty — officially transfer duty in most states — is a state tax charged whenever a property changes hands. The buyer pays it, usually at or soon after settlement: the day the money moves and you get the keys.

After your deposit, it's often the single biggest upfront cost of buying — worth understanding before you fall in love with a listing, not after.

Stamp duty was originally the fee for a government official stamping your property documents. The stamp retired decades ago; the tax did not.

Today it's a plain tax on buying: purchase a property, pay the state a percentage of the price. The money funds state services — hospitals, schools, roads.

The rate climbs in steps, like income tax brackets, so pricier properties hand over a bigger slice. On a typical capital-city home, it commonly runs into the tens of thousands.

Stamp duty is usually payable at settlement or within a short window afterwards — the deadline depends on your state. Your conveyancer or solicitor — the legal pro handling the property paperwork — normally arranges it.

The part that stings: most lenders won't let you fold stamp duty into your home loan. It comes out of your savings, on top of your deposit.

So the real price of a property is the sticker price plus stamp duty, legal fees and inspections. Budget for the whole stack before you raise a hand at auction.

Stamp duty is a state tax, not federal. Every state and territory sets its own rates, steps, discounts and rules, so the same $700,000 house can attract a very different bill depending on which side of a border it sits.

The rules change regularly too, usually at budget time. Some states have flirted with swapping stamp duty for a smaller yearly property tax; others fiddle with the discounts.

So don't trust a number quoted from another state or from two years ago. Check the current calculator on your own state revenue office's website before you buy.

Every state offers first home buyers some kind of stamp duty relief. Typically you pay nothing below a certain purchase price, get a discount above it, and the help phases out at a cap.

We're deliberately not quoting the cut-offs here — they change often and vary wildly between states.

Some states add extra help for new builds or vacant land. If it's your first home, check your state revenue office before you sign anything. The discount can be worth tens of thousands — but usually only if you apply correctly and meet the conditions, like living in the home for a minimum period.

Buying as an investor? No first-home-style discounts, and some states add extra duty for certain buyers, such as foreign purchasers.

The consolation: stamp duty on an investment property can't be claimed upfront at tax time, but it joins your cost base — the running total of everything the place really cost you — shrinking your capital gain, and your capital gains tax (CGT) bill, when you eventually sell.

Keep the settlement statement forever. Future-you, doing a CGT calculation in fifteen years, will need it.