Who Pays Stamp Duty When Selling Property?

Are you pondering the question of who pays stamp duty when selling a property? Well, we’re here to shed light on all the details, including the definition of stamp duty, the typical costs, who pays and stamp duty exemptions.

(If you’re looking for a knowledgeable real estate agent to help you sell your property, you can compare agents at LocalAgentFinder, including performance data, homeowner reviews, agency information, fees, commissions and more).

What is Stamp Duty?

Stamp duty, now known as land transfer duty, is paid by a property’s purchaser. It’s a state government tax levied on a property transaction (whether you’re buying land or a home) as compensation for transferring the title from the seller to the buyer.

It can affect some buyers’ willingness to purchase your property, especially if it has a high selling price. Stamp duty can also affect homeowners looking to sell, as the cost of selling a house, buying a new property and paying stamp duty can be off-putting. But, if you’ve got the right support through the process, you can cut down on other avoidable selling costs.

Stamp Duty FAQs

Do you pay stamp duty when selling a property?

No, it’s the buyer’s responsibility to pay duty fees, not the seller’s. However, the seller will need to pay other costs upon settlement, including agent commission fees, legal fees and capital gains tax (if applicable).

How much does stamp duty cost?

Stamp duty is a tax calculated as a percentage of the purchase price or a percentage of the purchased property’s market value (whichever is the greater value). It varies across Australia, as individual state and territory governments apply the payment. However, most states and territories have a system whereby the cheaper the property, the less tax paid.

How much duty you need to pay depends on several factors, including:

• Whether you’re purchasing a primary residence or an investment property.
• If you’re a first-home buyer.
• Your location.
• Whether you’re purchasing an established home, a brand new home or a vacant block.
• If you’re an Australian citizen or classified as a foreign purchaser.

When do you pay stamp duty?

Generally, stamp duty is an upfront cost paid at property settlement by the buyer, who has up to 30 days to pay. Until then, they don’t receive the title to the property. Your solicitor or conveyancer will calculate the stamp duty rate before settlement and advise you on the amount you need to pay. They’re the person that’s responsible for filing your settlement and any supporting documents for your state or territory government’s assessment.

How do you pay stamp duty?

This also depends on where you live, but when buying property, your stamp duty payment options include credit card, telephone or internet banking, electronic funds transfer, cheque or money order.

Is stamp duty a part of my house deposit?

No, a buyer has to pay stamp duty on top of their house deposit. When you’re buying a home, there are many additional costs to consider, including stamp duty, transfer fees, conveyancing costs and building and pest reports.

How much is stamp duty in Victoria?

In Victoria, duty is calculated on a sliding scale, starting at 1.4 per cent for properties valued at $25,000 and rising to 5.5 per cent for homes valued at and above $960,000.

Source: State Revenue Office Victoria

How much is stamp duty in New South Wales

Similarly to its southern counterpart, stamp duty in New South Wales is calculated on a sliding scale, starting at $1.25 for every $100, or part, of the dutiable value. It rises to $40,490 plus $5.50 for every $100, or part, by which the dutiable value exceeds $1 million.

Source: NSW Office of State Revenue

Stamp duty concessions and exemptions for first-home buyers

First-time buyers in all states apart from Tasmania and Northern Territory can benefit from stamp duty concessions and exemptions. For example, in New South Wales, first-home buyers are provided with a stamp duty exemption on properties worth up to $550,000 and concession rates on properties valued between $550,000 and $650,000.

In Victoria, first-home buyers who buy a property with a market value of $600,000 or less are exempt from the tax. First-home buyers purchasing a home with a market value from $600,001 to $750,000 can pay concessional stamp duty rates calculated on a sliding scale.

Meanwhile, in Queensland, there’s no stamp duty to pay for first-home buyers if they purchase a home under $500,000 or buy land under $250,000. There are several other exemptions and concessions available for land transfer duty. Examples include off-the-plan properties, deceased estates, death of the property’s owner, transferring ownership to a spouse, young farmers and more.

How can I get stamp duty rebates?

Depending on where you live in Australia and your personal circumstances, there are a few boxes you need to tick before you can receive a stamp duty concession or exemption:

• You must be an Australian citizen or permanent resident over 18 years of age.
• It must be your first property purchase.
• You need to live in the property for 12 consecutive months (sometimes six months, depending on the location) within 12 months of the property purchase.
• You cannot have a stamp duty exemption if you receive the First Home Buyer Grant.
• The property’s purchase price must be less than or equal to $1.5 million.

Paying stamp duty when selling – what’s next?

As mentioned, you don’t pay stamp duty when selling a property. But, if you’re looking to move home, it’s something to consider. If you’re thinking about selling your property, you can browse the best real estate agents with LocalAgentFinder to compare performance data, homeowner reviews, agency information, fees, commissions and more.