Stamp duty (also called transfer duty) is a state government tax levied on the purchase price of a property at the time of transfer. It is paid by the buyer and is one of the largest upfront costs in a property transaction — investors must account for it when calculating the total capital required.
State rates (approximate on a $600,000 purchase):
– NSW: approximately $22,490
– Victoria: approximately $31,070
– Queensland: approximately $12,850
– South Australia: approximately $26,830
– Western Australia: approximately $19,665
Rates vary and are progressive — the stamp duty amount increases with the purchase price. Most states also apply a foreign investor surcharge of 7–8% of the property value for non-resident buyers.
First home buyers. First home buyer concessions and exemptions apply in most states for properties below set thresholds. These do not apply to investment properties purchased by investors who already own property.
Foreign purchaser surcharge. Non-Australian resident investors pay an additional surcharge on top of standard stamp duty, making foreign investment in residential property substantially more costly.
Stamp duty and borrowing. Most lenders require stamp duty to be paid from genuine savings — it cannot be borrowed as part of the investment loan. Investors must have the stamp duty amount available in addition to their deposit.
Impact on strategy. The high upfront cost of stamp duty affects the breakeven point for an investment property. Properties held for short periods may not generate sufficient capital growth to cover stamp duty and other transaction costs.
