Transfer duty, previously known as Stamp Duty, is a crucial tax to understand when purchasing property in New South Wales. This state tax applies to various property transactions and can significantly impact the overall cost of buying a property. In this article, we'll explore what Transfer Duty is, how it's calculated, and the key considerations for Purchasers, including potential exemptions, concessions, and additional duties for foreign Purchasers and high-valued properties. Understanding these factors can help you navigate the property market more effectively and avoid unexpected costs.
Transfer Duty is a state tax which is payable on dutiable transactions in New South Wales. It is calculated on the higher of purchase price under the contract and the property’s unencumbered market value.
Dutiable transactions in NSW include:
Yes. Addition duty payable on high-value properties is known as premium transfer duty. Presently, if you purchase a residential property valued more than $3,636,000, a premium rate will be applicable.
The current premium rate is $182,389 plus 7% of the value over $3,636,000.
Yes, foreign Purchasers in New South Wales are required to pay additional transfer duty, known as surcharge purchaser duty, in addition to transfer duty on the purchase of the property. The surcharge is currently calculated at 8% of the greater of the purchase price and value of the property.
As transfer duty is applicable to each transaction, it is paramount to ensure that the contract specifies the Purchaser as person or entity that will legally own the Property. Otherwise, there may be additional transfer duty payable to transfer the property into the correct person or entity’s name.
Transfer Duty may be partially or fully exempted for:
In New South Wales, the First Home Buyers Assistance Scheme provides exemption or concession of transfer duty to eligible first home purchasers of eligible purchases.
An eligible purchaser must:
An eligible purchase must:
Eligible first home Purchasers of vacant land in NSW can apply for a full transfer duty exemption if the land is valued below $350,000. You can apply for a concession if the value is more than $350,000 but less than $450,000.
If none of the Purchasers satisfies the relevant requirements for living in the property as principal place of residence after settlement, the Purchasers will no longer be eligible for the concession or exemption obtained. So if you sell the property before satisfying the relevant requirements for living in the property, you will no longer be eligible for the concession or exemption obtained.
If your circumstances change and the relevant requirements for living in the property can no longer be satisfied, you must notify Revenue NSW straight away to arrange for the correct duty (including any interest) to be paid. Otherwise, you will face the possibility of penalties.
Purchasing from a Vendor who is related to or associated with one or all of the Purchasers does not affect the Purchasers’ eligibility for the First Home Buyers Assistance Scheme. However, Revenue NSW generally requires a valuation dated less than 3 months before the contract date. If any transfer duty is payable, the duty must be assessed on the higher of the purchase price under the contract and the value noted on the valuation
You can still obtain Transfer Duty Concession or Exemption in a shared equity arrangement if you and other eligible purchasers are buying at least 50% shares of the property. This is providing the ineligible Purchasers are not the spouses of the eligible Purchasers.
Transfer duty calculated on the normal rate must be paid on the shares of the property acquired by the ineligible Purchasers.
Disclaimer: Every property transaction is different, and the information provided may not be relevant to your circumstances. By using this site you agree that the information provided is for general purposes only and does not constitute legal, financial, or professional advice.
