Transfer duty (also known as stamp duty) is a key cost to be aware of if you’re thinking of buying a property in NSW.
What is transfer duty?
Transfer duty (often referred to as stamp duty) is a tax imposed by the NSW government when property ownership is transferred. It is payable when a property purchase is formalised. The kinds of property It applies to includes:
- Investment properties;
- Holiday homes;
- Vacant land;
- Commercial properties;
- Farming properties; and
- Business assets that include property.
Transfer duty rules vary between the states and territories. If you’re buying property in a different state, checking it’s requirements can help you avoid unexpected costs.
In NSW, the duty is calculated based on the property’s purchase price or market value, whichever is higher.
Who pays transfer duty?
In NSW, only the buyer is responsible for paying transfer duty.
Buyers must pay the transfer duty within three months of signing the contract for sale or on settlement (whichever is earlier). The exception is off-the-plan purchases, where certain conditions may extend the payment deadline.
How much is transfer duty?
The amount of transfer duty payable depends on the property’s purchase price.
Below is a breakdown of the current transfer duty rates in NSW:
| Property value | Transfer duty rate |
| $0 to $17,000 | $1.25 for every $100 (minimum $20) |
| $17,000 to $37,000 | $212 plus $1.50 for every $100 over $17,000 |
| $37,000 to $99,000 | $512 plus $1.75 for every $100 over $37,000 |
| $99,000 to $372,000 | $1,597 plus $3.50 for every $100 over $99,000 |
| $372,000 to $1,240,000 | $11,152 plus $4.50 for every $100 over $372,000 |
| Over $1,240,000 | $50,212 plus $5.50 for every $100 over $1,240,000 |
Image source: Revenue NSW
Transfer duty exemptions and concessions
Exemptions and concessions and offered by NSW to eligible buyers include:
First home buyer assistance scheme: Eligible first-home buyers may receive a partial or full exemption on transfer duty for properties valued up to a certain threshold. This can significantly reduce upfront costs and make home ownership more accessible.
Off-the-plan purchases: If you buy an off-the-plan property as your principal place of residence, you may be eligible for a deferral of transfer duty. This allows you to delay paying transfer duty until the property is completed or up to an extra 12 months has passed, which can help with cash flow.
Deceased estates and transfers between family members: Some transactions, such as a transfer of property as part of a deceased estate, between spouses, or due to inheritance, may be exempt from transfer duty.
Exemptions for certain transactions: Transfers forming part of a property settlement following the breakdown of a de-facto relationship or marriage may also be exempt from transfer duty.
Small business relief: In some cases, small businesses purchasing commercial property may be eligible for reduced transfer duty rates or exemptions.
Buyers should check with Revenue NSW to see if they qualify for an exemption or concession.
Does the seller pay transfer duty?
In NSW, although sellers do not pay transfer duty, they may have other financial obligations, such as:
- Real Estate Agent Fees: Sellers normally pay their real estate agent commission;
- Legal and conveyancing Fees: Costs associated with preparing the contract, conducting searches, and handling legal aspects of the sale;
- Capital Gains Tax (CGT): If the property for sale is not the seller’s principal place of residence, they may be required to pay CGT on profit from the sale.
Calculating and paying transfer duty
Buyers can calculate their estimated transfer duty using the NSW Revenue’s online calculator.
To pay, buyers must:
- Obtain an Assessment Notice from Revenue NSW;
- Pay the duty:-
- within the specified period (usually three months from the contract date); and
- before the property transfer is registered with NSW Land Registry Services.
Here to Help
Contact us if you plan to buy a property in NSW and need advice to ensure that your is property transaction smooth and trouble-free.
