In NSW, the buyer pays transfer duty, also called stamp duty.
It is due by settlement, or within 3 months of signing the contract, whichever comes first.
The seller does not pay transfer duty.
What transfer duty is
Transfer duty is a NSW state tax on many property transactions.
It most commonly applies when you buy a home.
It is collected by Revenue NSW.
It also applies to some transfers where no money is paid, such as a gift of property, unless an exemption applies.
Who pays it
The buyer, or the person receiving the property, pays the duty.
This is the case even if someone else arranges the payment.
The seller, or the person transferring the property, does not pay.
How the amount is worked out
Duty is worked out on the dutiable value.
The dutiable value is the higher of the price and the market value of the property.
Duty is not a flat rate. It is charged on a sliding scale, and a higher rate applies to residential property above a set threshold.
Revenue NSW has an online calculator. We confirm the amount for your purchase before settlement.
When it is due
Duty is due on the earlier of:
- The settlement date.
- Three months after the contract is signed.
Revenue NSW gives this example. A contract is signed on 1 March and settlement is on 12 April. Duty is due by 12 April. If settlement is put back to 1 September, duty is still due by 1 June.
If duty is paid late, interest is charged daily on the overdue amount until it is paid.
How it is paid
Where a solicitor or conveyancer acts for you, they usually work out the duty, lodge the transaction, and arrange payment by the due date.
You remain responsible for making sure it is paid on time.
If you act for yourself, you lodge with Revenue NSW, which issues a notice of assessment showing the amount and the due date.
Exemptions, concessions and deferral
Some buyers pay less duty, or none:
- First home buyers. Under the First Home Buyers Assistance Scheme, for contracts exchanged on or after 1 July 2023, a home valued up to $800,000 is exempt, and a home valued above $800,000 and below $1 million pays a concessional rate. Vacant land to build a home on is exempt up to $350,000, with a concessional rate above $350,000 and below $450,000. Eligibility rules apply, including living in the home.
- Some transfers between spouses or de facto partners, and after a relationship breakdown.
- Some transfers from a deceased estate.
Owner-occupiers buying off the plan may be able to defer payment. With the deferral, duty is due on the earliest of 15 months after signing, completion, or assignment of the contract. The deferral is not automatic. An application must be made.
Foreign persons buying residential property may also pay surcharge purchaser duty, on top of transfer duty.
Where buyers get caught
Assuming duty is paid by the seller.
It is not. The buyer pays, and must have the funds ready by the due date.
Not budgeting for duty in the loan.
Duty is a cost on top of the price. Confirm with your lender what your loan will cover.
A long settlement.
If settlement is more than 3 months after the contract, duty is due at 3 months, before settlement.
Acting on an emailed payment request.
Revenue NSW warns of scams involving duty payments. Confirm any request with your solicitor by phone before you pay.
Common questions
Is stamp duty the same as transfer duty?
Yes. Transfer duty was previously called stamp duty.
Do first home buyers pay transfer duty?
It depends on the value of the property and whether you meet the eligibility rules. Some first home buyers pay none, and some pay a lower rate.
Can transfer duty be added to my loan?
That is a matter for your lender. Ask them before you exchange.
Know the duty on your purchase before you sign. Call (02) 8062 6300.
This article is general information only. It is not legal advice for your situation.