What You Should Know About Stamp Duty

Stamp duty is part of buying property in Australia. But it’s also a tax that few buyers understand. Here we answer all your questions such as: what is stamp duty? How much is it? And where does all that cash go?

What is stamp duty?

Stamp duty is a form of tax that depends on the state or territory which you’re buying into. It is applied to multiple transactions, such as transfers of property, mortgages and motor vehicle registrations. It can also be imposed on some insurance and gifts.

That transaction is charged with the amount based on the greater market value of the property or price paid, including any GST. Therefore, the more expensive the property, the higher the stamp duty.

If you are new to the market or buying interstate, its important to remember to factor the stamp duty into your budget.

By working out how much needs to be paid from the offset, you could save yourself stress in the long run.

Who pays stamp duty?

In real estate, the buyer pays the stamp duty.

How much is stamp duty?

Stamp duty is decided by separate state and territory governments, rather than the federal government, so rates vary throughout Australia.

Each state has different approaches to stamp duty, so working out the amount you pay can be confusing.
It’s also important to note that some states, such as Queensland, offer concessions to first-home buyers.

When do you have to pay stamp duty?

Just as stamp duty rates vary from state to state, so does the timeframe of which people need to pay it. In Queensland, stamp duty is payable within 30 days of settlement.

If were to you fail to pay within the given timeframe, you would have to pay additional penalty rates and interest.

Are there any exemptions?

State governments offer stamp duty exemptions when property changes hands following a death or divorce or is transferred between family members.

If you’re a first home owner in Queensland, you may be able to claim one of the first home concessions for transfer duty and the Queensland First Home Owners' Grant.

How do you pay stamp duty?

State governments generally accept payments online, via credit/debit card or bank transfer. Some also accept payment via cheque.

What is the money used for?

Stamp duty is invested into the economy by the state and territory governments which collect it.

The revenue is added into all state government budgets, which typically cover sectors such as health, transport and roads, police, justice and emergency services.