When is Stamp Duty Payable NSW

When is Stamp Duty Payable NSW

When is Stamp Duty Payable NSW

Find out more about stamp duty in NSW, how long you have to pay, and what factors to consider when calculating the cost.

When buying a house or land, understanding all of the associated costs is critical. The NSW government requests that stamp duty be payable upon settlement of the property, or you may be liable for additional fees. There are circumstances where this may not occur and exemptions to payment of the tax. Let’s take a closer look.

When Is Stamp Duty Payable In NSW?

The purchaser will need to pay stamp duty in NSW within three months of signing the contract; otherwise, interest and fees will be accrued.

Your conveyancer or property lawyer can help you lodge your stamp duty documentation as a part of the settlement process. They can offer advice as to whether you are entitled to any exemptions or concessions.

Off The Plan Properties

If you are purchasing an off the plan property (a house or unit under construction), where you intend to live you are entitled to defer your stamp duty for up to 12 months or until the property is completed, whichever comes first. This deferral aims to help the owners meet the additional costs associated with building a new home.

If you purchase a property off the plan as an investment, you are not eligible for the extended payment time frame. Stamp duty is payable within the three month period.

What Is Stamp Duty?

Stamp duty is a tax charged by the NSW government when a property title is transferred from one person to another. Only the person buying the property is responsible for the payment, and Revenue NSW governs it. Property can include a house, apartment, investment property or vacant land. You should factor stamp duty into your home buyers budget as the charges can be substantial. Besides the deposit, it is likely to be one of the most significant upfront expenses when buying your property.

In NSW, stamp duty is also known as transfer duty, and it is payable to the state revenue office. The money goes towards the NSW state budget to fund public sectors such as emergency and health services.

Every State and Territory in Australia charge the tax, and other transfers of property may also incur the fee, such as selling your motor vehicle and transferring the registration.

How Much Is Stamp Duty?

The stamp duty rates will vary from state to state, but in all cases, the transfer duty is based on the market value of the home, or sale price, whichever is higher. Stamp duty in NSW is calculated on a sliding scale, so the more expensive your property is, the more you are liable to pay.

You must calculate stamp duty correctly. An excellent way to receive an accurate estimate is by using a NSW stamp duty calculator.

The following standard transfer duty rates can provide an estimation.

PROPERTY VALUE STAMP DUTY
$0 – $14 000 $1.25 for every $100 ($10 minimum)
$14 000 – $32 000 $175 plus $1.50 for every $100
$32 000 – $85 000 $445 plus $1.75 for every $100
$85 000 – $319 000 $1 372 plus $3.50 for every $100
$319 000 – $1 064 000 $9 562 plus $4.50 for every $100
Over $1 064 000 $43 087 plus $5.50 for every $100

Premium Transfer Duty

Residential properties valued over $3 million will be liable for premium transfer duty fees.

PROPERTY VALUE STAMP DUTY
Over $3 194 000 $160 237 plus $7.00 for every $100

Homebuyers should be aware that the threshold amounts are adjusted annually in accordance with inflation and the consumer price index (CPI.) Prices will vary depending on which state or territory in Australia you are purchasing the property

Foreign buyers of property in NSW will also be required to pay an additional surcharge purchasers duty of 8% and the standard transfer duty fees.

Stamp Duty Exemptions In NSW?

When looking at buying a house or apartment in NSW, there are several ways that you can reduce or even avoid paying stamp duty altogether.

If you were entitled to a concession or exemption and have already paid stamp duty, you can apply for a refund within five years of payment.

First Home Buyers

If you are a first home buyer, you are eligible for a concession or a total exemption from paying stamp duty in NSW. The first home buyers assistance scheme (FHBAS) applies to new and existing homes and vacant land.

Depending on the value of your new home, the concession rates will vary. For example, you can apply for a total exemption for a new or established home valued under $650 000. Over that price, you are eligible for a concession up to $800 000.

For vacant land, you can apply for an exemption if the valuation is less than $400 000 or a concession if the valuation is between $400 000 and $500 000.

To be eligible for an exemption or concession, you need to comply with the following:

  • Australian citizen or permanent resident
  • Over 18 years old
  • Have never owned property in Australia
  • Companies or trusts are not eligible
  • Occupy your home for at least the first six months after construction
  • Move into the house within 12 months after purchase
  • Only valid for the entire property
  • Have not received a previous exemption under the same scheme

Divorce

In the case of a divorce or de facto relationship breakdown, you may be eligible to receive a stamp duty exemption if the residential property is transferred to either party or child of the relationship or a trustee.

Deceased Estate

When a property is bequeathed in accordance with the terms of the will, Revenue NSW will enforce a flat rate of $50 instead of the usual stamp duty fees.

Family

When a married or de facto couple transfers their residential property or land to their partner or spouse, no transfer duty is payable as long as the property is held equally by both as a result.

De facto couples will need to live together for two years before they are eligible to apply for this exemption.

Property transfers between other family members are liable for stamp duty.

Proposed Property Tax In NSW

The New South Wales state Treasurer recently announced a proposal to give home buyers a choice between a stamp duty fee, paid as a lump sum, or a smaller annual property tax. An annual property tax may be a more cost-effective way to purchase a home, depending on your living situation. The reform is currently under review with the State Government.

Summary

NSW stamp duty is a tax imposed by the state government when a property title is transferred from one person to another. Only the person buying the residential property is required to pay stamp duty.

Generally, you need to pay stamp duty in NSW within three months of settlement unless you purchase an off-the-plan property. In that case, you can defer your stamp duty for up to 12 months or until the property is completed.

The property value transfer duty must be calculated correctly. An ideal way to receive an accurate estimate is by using a NSW stamp duty calculator. In all cases, the transfer duty is based on the market value of the home. Stamp duty in NSW is calculated on a sliding scale, so the more expensive your property is, the more you are liable to pay. You should factor stamp duty into the home buyers budget as the charges can be substantial. Besides the deposit, it is likely to be one of the most significant upfront expenses when buying your property. Foreign buyers will need to pay 8% extra.

Suppose you are:

  • A first home buyer.
  • The beneficiary of a deceased estate.
  • Transferring property to your spouse
  • Transferring property due to a divorce or separation

In that case, you may be eligible for a concession or a complete exemption from paying stamp duty in NSW.

First home buyers purchasing a property are eligible for a concession or a total exemption from paying transfer fees for new and existing homes, as well as vacant land.

NSW stamp duty is complex. Understanding how much you need to pay can get confusing. For comprehensive advice and support, a property lawyer can help.

FAQs

1. Do You Have To Pay Stamp Duty Before Settlement In NSW?

In most cases, people pay stamp duty within three months of signing the contract. If your settlement period is longer than three months, NSW stamp duty is payable before the settlement date. You must pay stamp duty before three months, or additional fees and interest will be charged.

2. What Are The Stamp Duty Rates After March 2021?

Stamp duty in NSW is calculated on a sliding scale, so the more expensive your property is, the more you are liable to pay. The transfer duty is based on the home’s market value or sale price, whichever is higher. To receive an accurate estimate, a stamp duty calculator can help.

PROPERTY VALUE STAMP DUTY
$0 – $14 000 $1.25 for every $100 ($10 minimum)
$14 000 – $32 000 $175 plus $1.50 for every $100
$32 000 – $85 000 $445 plus $1.75 for every $100
$85 000 – $319 000 $1 372 plus $3.50 for every $100
$319 000 – $1 064 000 $9 562 plus $4.50 for every $100
Over $1 064 000 $43 087 plus $5.50 for every $100

Suppose you are a first home buyer, the beneficiary of a deceased estate, or transferring a property to your spouse. You could be eligible for a concession or a complete exemption from paying stamp duty in NSW.

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