Transfer duty is a tax imposed by the NSW government when property ownership is transferred. It is payable when a property purchase is formalised. It applies to property including the following:
- 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. 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. The exception is off-the-plan purchases, where the payment deadline may be extended.
How much is transfer duty?
The amount of transfer duty payable depends on the property’s purchase price.
Current transfer duty rates are published on the Revenue NSW website.
Buyers can calculate their estimated transfer duty using the NSW Revenue’s online calculator.
Are there any exemptions or concessions?
Exemptions and concessions 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 threshold purchase price.
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 for up to 12 months.
Deceased estates and transfers between family members: Some transactions, such as a transfer of property as part of a deceased estate or between spouses, 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?
Vendors do not pay transfer duty but may have to pay:
- Real Estate Agent Fees;
- Legal and conveyancing Fees;
- Capital Gains Tax (CGT) (if the property for sale is not the seller’s principal place of residence).
How do I calculate and pay transfer duty?
To pay, buyers must:
- Obtain an Assessment Notice from Revenue NSW;
- Pay the duty:
- within 3 months from the contract date; and
- before the property transfer is registered with NSW Land Registry Services.
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