Transfer duty — everyone still calls it stamp duty — is the NSW state tax you pay when you buy property. It’s calculated on a sliding scale against your purchase price, it’s due at or shortly after settlement, and it cannot be added to your home loan. That last part surprises people: you need it in cash, on top of your deposit. So let’s make the number predictable.
Roughly what it costs
NSW duty is progressive — higher slices of the price are taxed at higher rates (from 1.25% on the first slice up to around 7% for the top brackets, with a premium rate for $3m+ homes). As a feel for the numbers at common Sydney price points:
- On a $650,000 purchase — roughly $24,000
- On an $850,000 purchase — roughly $33,000
- On a $1,000,000 purchase — roughly $40,000
- On a $1,500,000 purchase — roughly $67,000
Those are approximations (thresholds are indexed each year) — for your exact figure use the stamp duty calculator, which I keep current with Revenue NSW’s rates.
First home buyers: the $0 path
The First Home Buyers Assistance Scheme (FHBAS) is the big one:
- Full exemption — buy a new or established home up to $800,000 and pay no duty at all.
- Concession — between $800,000 and $1,000,000 the duty phases back in on a sliding scale, so at $850k you pay a fraction of the full rate.
- Vacant land — exempt up to $350,000, concession to $450,000 (pairs with a construction loan).
On that $800,000 purchase, the exemption is worth roughly $31,000 — often more than the deposit shortfall that’s keeping people renting. And it stacks with the Home Guarantee Scheme and, on new builds, the $10,000 First Home Owner Grant — my NSW first home buyer guide shows the full stack.
The residency conditions trip people up: to keep the FHBAS exemption you must move in within 12 months of settlement and live there for a continuous 12 months. Planning to rentvest from day one? Then you generally can’t use the exemption — weigh that trade-off properly (I’ve written more in the rentvesting guide).
Other rules worth knowing
- Off-the-plan deferral: owner-occupiers buying off the plan can defer duty for up to 12 months (or until completion if sooner) — useful breathing room while you keep saving.
- Foreign purchaser surcharge: if you’re not a citizen or permanent resident, a surcharge (currently 9%) applies on top of normal duty. If that’s you, read my guide to buying on a visa before you budget anything.
- Investors pay full freight: there’s no investor concession — duty is simply a (capital) cost of the purchase.
- Each state is different: QLD, VIC, WA and SA all have their own schemes — see my state guides if you’re buying interstate.
Budgeting it properly
When I run numbers with clients, duty sits in a simple “cash to complete” line-up: deposit + duty (if any) + legals (~$1,500–$2,500) + inspections + adjustments. Getting this list right before you bid is the difference between a smooth settlement and a scramble. It takes me about ten minutes to map yours — and the duty line is often $0 once we apply the right scheme.