The stamp duty on property purchases in Australia varies per state or territory. Many luxury property buyers, especially foreigners, often forget to take stamp duty into account.
While calculating deposits, mortgages and property inspections is important, stamp duty may involve the biggest amount of upfront payment. If you’re a first-time home buyer, you may enjoy full or partial exemptions from stamp duty, depending on your citizenship or residency status.
There’s no standard rate for payments of stamp duty in Australia, which further complicates matters for buying luxury residences. For this reason, this guide discusses the basics of stamp duty in Australia’s eight key regions.
Australian Capital Territory (ACT)
The ACT government introduced a 20-year tax reform program in 2012, including changes to stamp duty payments. For instance, the general stamp duty for property purchases worth up to AUD 1.455 million (US $1.024 million) will be lower by AUD 1,040 from 2021 to 2022.
Take note that reduced stamp duties only apply to owner-occupied properties. If you plan to buy a luxury property worth AUD 3 million (roughly US $2.1 million), you would pay “a flat rate of AUD 4.54 per AUD 100 applied to the total transaction value,” according to the ACT Revenue Office.
New South Wales (NSW)
Foreign luxury property buyers in Sydney and elsewhere in NSW pay an 8% surcharge duty, aside from the usual transfer duty. The state government has imposed an additional duty for foreigners since July 2017.
Luxury property buyers also pay a premium rate for stamp duty on residential properties worth more than AUD 3.194 million (US $2.248 million). It costs AUD 160,237, plus AUD 7 for every AUD 100 over AUD 3.194 million, according to the state’s revenue office.
Unlike in other regions, non-foreign luxury property buyers in the Northern Territory don’t have to crunch too many numbers to calculate stamp duty. For example, you would pay AUD 230,000 in estimated stamp duty when you buy a AUD 4 million (US $2.818 million) property. The amount represents 5.75% of the purchase price.
The state department of treasury and finance provides luxury property buyers with a stamp duty calculator to determine the estimated rates. You should only use the calculator if you aren’t entitled to concessions (e.g. senior, pensioner), first-time home buyer discount or rebates.
The Queensland government provides luxury property buyers with two options for calculating stamp duty: the transfer duty calculator and the transfer duty estimator. You should use the calculator and estimator for complex and simple calculations, respectively.
Buyers should keep in mind that stamp duty in Queensland is calculated based on dutiable value. The general stamp duty would cost “AUD 38,025 plus AUD 5.75 for each AUD 100, or part of AUD 100,” for property transactions worth over AUD 1 million (US $704,535), according to the state government.
The general stamp duty rates in South Australia seem straightforward at first glance. You only need to pay “AUD 21,330 plus AUD 5.50 for every AUD 100, or part of AUD 100,” over AUD 500,000, according to the state government.
Once you calculate the estimated stamp duty, it becomes clear that you’ll pay more for a higher-priced property than in some regions. For example, the estimated stamp duty for a AUD 3 million property in South Australia would cost AUD 158,830. In Queensland, you would pay approximately AUD 153,025 in stamp duty for a similarly priced property.
The price cap of AUD 500,000 in South Australia ultimately affects the actual amount. If you’re a foreign luxury property buyer, you also need to pay a 7% surcharge.
The Victorian government charges “AUD 110,000 plus 6.5% of the dutiable value” over AUD 2 million (US $1.409 million) as the general stamp duty rate. Similar to NSW, foreign luxury property buyers in Victoria pay an 8% surcharge. The cost of stamp duty also increases greatly when foreigners buy high-end properties in Melbourne.
For example, you would pay AUD 415,000 in stamp duty for a AUD 3 million property based on these factors:
- The buyer is a foreign purchaser.
- The transaction involves a new, non-residential property in Melbourne.
- The property didn’t remain unsold for at least one year after issuance of a certificate of occupancy.
- The property is the buyer’s primary place of residence.
The estimated stamp duty (i.e., AUD 415,000) for a AUD 3 million property in Melbourne already includes the 8% surcharge.
The general stamp duty rate in Western Australia costs “AUD 28,453 plus AUD 5.15 per AUD 100” or part of AUD 100 above AUD 725,000. Foreign luxury property buyers in the state will pay an additional 7% in stamp duties.
The Tasmanian government’s prevailing stamp duty rate generally costs “AUD 27,810 plus AUD 4.50 for every AUD 100” or part of AUD 100 over AUD 725,000. Foreign luxury property buyers also pay an 8% Foreign Investor Duty Surcharge (FIDS).
The state may waive the surcharge for foreigners based on different conditions. For example, a foreigner won’t pay FIDS if the property would be their primary residence. Check out the full list of conditions to know more.