What Transfer Duty Means and How It Affects Property Buyers

Transfer duty, commonly known as stamp duty, is one of the biggest upfront costs when buying a property and can often catch buyers by surprise if it’s not planned for early. We’re going to break down what stamp duty is, how it works in NSW and who can potentially get an exemption below.

Transfer Duty Explained

Simply put, transfer duty is a duty or tax charged by the State Government for certain types of transactions and is generally paid by the purchaser. You’ll find it on different transactions like mortgages, property transfers and vehicle registrations. Some gifts and insurance also have transfer duty tax. Each state and territory charges a transfer or stamp duty and the rules and rates can vary significantly between states.

How NSW Calculates Transfer Duty

In NSW, transfer duty is calculated on a sliding scale based on the purchase price. It can be calculated on either the property’s sale price or its current market value whichever amount is higher.

When Transfer Duty Is Paid

Typically, transfer duty must be paid within three months of the contract for sale or transfer of property being signed. If you are unable to pay your transfer duty on time, you will be charged interest on the amount owing and may also face a penalty of around 25% of the unpaid amount.

Who Can Get Transfer Duty Exemptions in NSW

In NSW, the Government offers the First Home Buyers Assistance Scheme which means first-time home buyers may be eligible for an exemption or concession on transfer duty taxes. There are a number of requirements that must be met to be eligible.

If you are unsure about your eligibility for a transfer duty exemption or need help understanding how it applies to your property purchase, we encourage you to get in touch with our friendly team on 1300 327 826.