Stamp Duty (Transfer Duty)
Buying & Selling
A state government tax paid when you purchase a property, calculated as a percentage of the purchase price.
Full Explanation
Stamp duty is charged by state and territory governments on property transfers. Rates vary by state and are calculated on a sliding scale based on the property value. First home buyers may receive concessions or exemptions depending on the state and property value. For investors, stamp duty is added to the cost base of the property, reducing capital gains tax when you eventually sell.
Example
Purchasing a $600,000 investment property in NSW incurs approximately $22,000 in stamp duty.
Frequently Asked Questions
Can I add stamp duty to my loan?
Some lenders allow you to capitalise stamp duty into the loan, but this increases your LVR and may trigger LMI. It is generally better to pay stamp duty from savings if possible.
Is stamp duty tax-deductible?
Stamp duty is not an immediate tax deduction. However, it forms part of your cost base for CGT purposes, which reduces your taxable capital gain when you sell the property.