Stamp Duty in Australia: What You Could Pay and Ways to Reduce the Cost
Key Takeaways
Stamp duty is a state tax with no single national figure; it depends on your state, the dutiable value, the property type and your buyer status, and usually must be paid in cash.
First home buyer concessions are the biggest lever: in 2026, NSW exempts purchases up to $800,000 (concession to $1,000,000) and Victoria up to $600,000 (concession to $750,000).
Thresholds create cliffs, so a small price negotiation that keeps you under one can save thousands, and a house-and-land package may mean duty on the land only.
Duty interacts with your deposit, LVR and LMI, so avoiding it frees cash for a stronger deposit; confirm current rules with your state revenue office.
Of all the costs of buying a home, stamp duty is the one most likely to catch buyers off guard. It is often the largest expense outside the deposit; it usually has to be paid in cash, and the amount changes dramatically depending on where you buy and who you are. With the Reserve Bank of Australia (RBA) cash rate at 4.35% after a run of increases through the first half of 2026 and budgets already stretched, an unexpected stamp duty bill can be the difference between settling comfortably and scrambling at the last moment.
The good news is that stamp duty is also one of the most reducible costs, particularly for first-home buyers. Concessions and exemptions vary by state, thresholds create cliffs that are worth knowing about before you make an offer, and certain purchase structures can lower the duty payable. For buyers along the New South Wales and Victorian border, where the two states have quite different rules, understanding the difference can be worth tens of thousands of dollars.
This article explains what stamp duty is, why it varies so much, what you could pay in New South Wales and Victoria, when it is due, and the practical ways to reduce it.
What is stamp duty?
Stamp duty is a tax charged by state and territory governments when property changes hands. It goes by different names in different places, but it is the same kind of charge wherever you buy.
In New South Wales, it is officially called transfer duty, and in Victoria, it is land transfer duty, though almost everyone still calls it stamp duty. It is a one-off cost, calculated on the value of the property and paid around the time of settlement, and it is administered by each state's revenue office. Because it is a state charge rather than a federal one, the rates, thresholds and concessions differ from one state to the next, which is why there is no single Australian stamp duty figure.
Why does stamp duty vary so much
Two buyers paying the same price for similar homes can owe very different amounts of stamp duty, depending on where and what they are buying. Understanding the variables helps you estimate your own figure.
The amount you pay depends on four main things: the state or territory you buy in, the dutiable value of the property, which is generally the higher of the purchase price or market value, the type of property, such as an established home, a new build, vacant land or an investment, and your status as a buyer, including whether you are a first home buyer, an owner-occupier, an investor or a foreign purchaser. Each state sets its own rates and its own concessions, so the same purchase can attract a very different bill across the border.
How stamp duty is calculated
Stamp duty is not a flat percentage; it is worked out on a sliding scale, so the calculation rewards knowing roughly where your price sits. The structure is similar to how income tax brackets work.
Duty is calculated on the dutiable value using a progressive scale, where higher-value properties attract a higher rate. This means the duty rises faster than the price, so a more expensive home costs proportionally more in duty, not just more in dollars. Because the exact figure depends on the precise value and the current rates, the most reliable way to get your number is to use your state revenue office's calculator or have your broker or conveyancer run it. What matters for planning is that you treat it as a high, price-dependent cost rather than a rough estimate.
When stamp duty is due
Knowing when stamp duty falls due is as important as knowing the amount, because it has to be available in cash at a specific point. The timing varies by state.
In most cases, stamp duty is paid at or shortly before settlement, and your conveyancer or solicitor arranges the payment through the state revenue office. The exact deadline differs: in New South Wales, duty is generally payable within three months of signing the contract, while in Victoria it is typically paid at settlement. Off-the-plan purchases can sometimes allow the payment to be deferred, which can help cashflow during construction. Paying late can attract interest or penalties, so it is something to have ready rather than leave to chance.
Can stamp duty be added to your home loan?
This is one of the most common misunderstandings, and getting it right protects your budget. Stamp duty is generally not part of your standard loan amount.
It is an upfront cost that needs to be available in cash, separate from the money you borrow. Some lenders may allow you to borrow a little extra to help cover it, depending on your deposit, your borrowing capacity and your eligibility, but doing so increases your loan, raises your loan-to-value ratio (LVR), can trigger Lenders Mortgage Insurance (LMI) and lifts your repayments. For most buyers, it is better to treat stamp duty as cash to save rather than debt to add, since borrowing to cover it can cost you more across the whole loan.
First home buyer concessions: New South Wales and Victoria
For first home buyers, concessions are by far the biggest lever on stamp duty, and they differ significantly between the two states. The thresholds below are current for 2026, but because they can change and eligibility conditions apply, it is worth confirming your position with the relevant revenue office.
New South Wales
New South Wales offers relief through the First Home Buyers Assistance Scheme (FHBAS). Eligible first home buyers pay no transfer duty on a home valued up to $800,000, and a concessional rate applies on a sliding scale between $800,001 and $1,000,000, above which full duty is payable. These thresholds have been in place since July 2023 and continue in 2026. For vacant land, a full exemption applies up to $350,000, with a concession between $350,001 and $450,000. A $10,000 First Home Owner Grant (FHOG) is also available for eligible new homes, subject to price caps. To qualify for the duty relief, you generally must be a genuine first home buyer who has never owned residential property in Australia, at least one buyer must be an Australian citizen or permanent resident, and you must move in within 12 months and live there for 12 continuous months. You can confirm the current rules through Revenue NSW.
Victoria
Victoria provides a first-home buyer duty exemption and concession on land transfer duty. Eligible first home buyers pay no duty on a property valued up to $600,000, with a concession on a sliding scale between $600,001 and $750,000 that tapers to full duty as the price approaches the upper threshold. These thresholds have been stable since July 2017 and were confirmed to continue in the 2026-27 Victorian Budget. A $10,000 First Home Owner Grant is available for eligible new homes, and a temporary off-the-plan concession has been extended to contracts signed before 21 April 2027, which can reduce the dutiable value on eligible properties. Eligibility broadly requires that you are an Australian citizen or permanent resident, aged 18 or over, have never owned property in Australia, and live in the home for 12 continuous months. The State Revenue Office Victoria, publishes the current rules.
Other states and the bigger picture
Every state and territory offers some form of first-home buyer relief, but the thresholds and rules differ widely, and some are changing. The Australian Capital Territory, for example, is moving to remove stamp duty for first home buyers as part of a long-term shift toward a land tax system. Because the differences are significant and the rules are periodically updated, the safest approach is always to confirm the current position with the revenue office in the state where you are buying.
New builds, vacant land, and off-the-plan purchases
How and what you build or buy can change your duty, sometimes substantially. These categories are treated differently from an established home purchase.
When you buy a house and land package with separate contracts, one for the land and one for the building, stamp duty is often payable only on the land component rather than the combined value, which can bring the dutiable amount under a concession threshold. Vacant land has its own, lower thresholds for first home buyer relief. Off-the-plan purchases can attract concessions in some states, such as Victoria's temporary off-the-plan concession, which reduces the dutiable value and can be the difference between paying duty and avoiding it. New builds may also open access to the First Home Owner Grant. Getting the contract structure right matters, so it is worth raising with your conveyancer early.
Investors, subsequent buyers and surcharges
Not every buyer benefits from a concession, and some pay more. Knowing where you sit helps you budget accurately.
Investors generally pay full stamp duty with no first-home buyer exemptions or concessions, so an investment purchase should be budgeted for the full duty amount. Buyers who have owned property before do not qualify for first-home buyer relief, though some states offer a principal place of residence (PPR) concession for owner-occupiers that provides a smaller benefit. Foreign purchasers usually pay an additional surcharge on top of standard duty, which in Victoria is an extra 8% of the property value. These differences can be large, so it is important to budget based on your actual buyer status rather than assuming a concession applies.
Ways to reduce or avoid stamp duty
Stamp duty is more reducible than many buyers realise, and a few deliberate choices can make a real difference. The strategies below are the most common ways to lower the cost.
Check your first home buyer eligibility, since the exemptions and concessions are the largest saving available.
Mind the threshold: because relief cuts off at set price points, a small price negotiation that keeps you under a threshold can save a substantial amount.
Consider a house and land package with separate contracts, where duty may apply only to the land.
Look at off-the-plan concessions where they are available, as they can reduce the dutiable value.
Check whether an exemption applies to your situation, such as certain transfers following a relationship breakdown.
The single most valuable habit is threshold awareness. Knowing exactly where the concession cliffs fall before you make an offer lets you negotiate with the duty in mind, rather than discovering the cost after you are committed.
How stamp duty affects your deposit, LVR and LMI
Stamp duty does not sit in isolation; it interacts with your whole buying strategy. The cash it consumes is cash that is no longer available for your deposit.
Because stamp duty must usually be paid from your own funds, a large duty bill reduces what you can put toward your deposit, which can lift your LVR and increase the chance of paying LMI. Conversely, reducing or avoiding duty through a concession frees up cash that can go straight to your deposit, lowering your LVR and potentially helping you avoid LMI. This is why duty is worth planning around early: it shapes not just your upfront cash but your loan size, your insurance cost and your repayments. A first home buyer who avoids duty entirely can sometimes redirect that saving into a stronger deposit position.
Real borrower scenarios
The way stamp duty plays out becomes clearer through real situations. The following examples show how the rules and thresholds affect different buyers.
A first home buyer in Victoria purchasing an established home for $590,000 pays no stamp duty at all, since the property sits under the exemption threshold, and redirects the saving into their deposit and buffer.
A first home buyer in New South Wales buying at $820,000 falls just into the concessional band above the $800,000 exemption, so they pay a reduced but real amount of duty; negotiating closer to the threshold would have saved them several thousand dollars.
An investor buying a rental property pays full stamp duty with no concession, and budgets for it in cash as part of their purchase costs.
A buyer purchasing a house and land package structures the contracts so duty applies only to the land, bringing the dutiable amount under a threshold and reducing the cost compared with buying an established home of the same total value.
How a mortgage broker helps
Stamp duty depends on your state, your price, your property type and your buyer status, and along the border it can differ sharply between New South Wales and Victoria. This is where a broker adds practical value beyond finding a rate.
A broker can estimate your duty for the state you are buying in, identify the concessions and grants you may be eligible for, show how the thresholds affect your price decisions, and fold the figure into your overall cash-to-settle calculation alongside your deposit, LVR and LMI. If you are buying around the Albury and Wodonga region, speaking with a mortgage broker in Albury & Wodonga can help you compare how stamp duty may differ between New South Wales and Victoria, check whether concessions or grants may apply, and factor the duty into your full cash-to-settle figure before you make an offer.
Frequently Asked Questions (FAQs)
Is stamp duty the same as transfer duty?
Yes, they are the same thing under different names. It is officially called transfer duty in New South Wales and land transfer duty in Victoria, but it is commonly referred to as stamp duty everywhere. It is a one-off state government tax on the transfer of property, calculated on the property's dutiable value and paid around settlement.
How much stamp duty will I pay?
There is no single figure, because it depends on your state, the property's value, the property type and your buyer status. Duty is calculated on a sliding scale, so it rises faster than the price. The most reliable way to get your number is to use your state revenue office's calculator or have your broker or conveyancer work it out, especially since first home buyer concessions can reduce or remove it entirely.
Do first home buyers pay stamp duty?
Often not, if they qualify and buy under the relevant threshold. In New South Wales, eligible first home buyers pay no duty up to $800,000, with a concession to $1,000,000. In Victoria, they pay no duty up to $600,000, with a concession to $750,000. Eligibility conditions apply, including never having owned property in Australia and living in the home, so it is worth confirming your position.
Can I add stamp duty to my home loan?
Generally no. Stamp duty is an upfront cash cost, not part of the standard loan amount. Some lenders may allow you to borrow a little extra to cover it, depending on your deposit and capacity, but this increases your loan, raises your LVR, can trigger Lenders Mortgage Insurance and lifts your repayments. For most buyers it is better treated as cash to save rather than debt to add.
Do investors pay more stamp duty?
Investors generally pay full stamp duty with no first-home buyer concessions or exemptions, so an investment purchase should be budgeted for the full duty amount. Foreign purchasers usually pay an additional surcharge on top, which in Victoria is an extra 8% of the property value. Buyer status makes a significant difference, so budget based on your actual circumstances.
Is stamp duty lower on new builds or vacant land?
It can be. With a house and land package on separate contracts, duty is often payable only on the land component rather than the combined value, which can bring the dutiable amount under a concession threshold. Vacant land also has its own lower first home buyer thresholds, and off-the-plan concessions are available in some states. The contract structure matters, so it is worth discussing with your conveyancer.
How does stamp duty affect my deposit and LVR?
Because stamp duty usually has to be paid in cash, it reduces the money available for your deposit, which can raise your loan-to-value ratio and increase the chance of paying Lenders Mortgage Insurance. Reducing or avoiding duty through a concession frees up cash for your deposit, lowering your LVR. This is why duty is worth planning around early, since it affects your loan size and insurance cost as well as your upfront budget.
The Bottom Line
Stamp duty is one of the largest and most variable costs of buying a home, and it usually has to be paid in cash, so it deserves attention early rather than as an afterthought. There is no single Australian figure: it depends on your state, your price, your property type and your buyer status. For first home buyers, concessions can remove or sharply reduce it, with New South Wales exempting purchases up to $800,000 and Victoria up to $600,000 in 2026, and the thresholds create cliffs worth knowing before you make an offer. Confirm the current rules with your state revenue office, fold the figure into your full cash-to-settle calculation, and you can plan your purchase around the duty rather than being surprised by it.