For generations of Australians, homeownership has been both important and attainable. As property prices rise and wages stagnate, getting together the cash for a 20% home loan deposit and the interest rates and associated fees have become increasingly more difficult for everyday Aussies.
Many people are stuck in rent cycles, spending the equivalent of a mortgage payment on monthly rent but unable to save the large lump sum required to purchase a first home.
Luckily, there are new options for first-home buying which can offer relief from daunting upfront costs. Here’s everything you need to know about stamp duty for first-home buyers.
What is stamp duty?
In Australia, you must pay stamp duty when buying a home. It is a one-time upfront government transfer duty charged when a property or land changes hands.
Stamp duty must be considered when calculating your home-buying budget. It can be around 4%-5% of the value of the property - a considerable sum that often reaches the tens of thousands.
The specific amount of stamp duty you owe on a property is dictated by the duty rates in the state in which you’re buying. These rates are usually tiered, so, generally speaking, the higher the purchase price, the more you will pay in stamp duty.
Head to the OwnHome stamp duty calculator to learn how much you could be paying.
Can first-home buyers get a reduction in stamp duty costs?
Most states offer stamp duty exemptions and concessions, especially for eligible first-home buyers. So, when calculating how much you will need to set aside for your first home - deposit, stamp duty, council fees, mortgage application, registration fees and ongoing home loan repayments etc. - it’s important to know which exemptions and concessions are available.
Which stamp duty concessions are available in each Australian state or territory?
To help first-time buyers get their feet on the property ladder, most state governments have introduced first-home buyer grants (FHOG) and significant fee concessions - even complete stamp duty exemptions -for those purchasing their first home. Keep in mind, each program has specific eligibility criteria, such as property market value, buyer residency status (Australian citizen, permanent resident, etc.) and that the home will be a residential property - not an investment.
Check out the list below to see which state stamp duty programs you might qualify for:
● New South Wales
The NSW government’s First Home Buyer Assistance Scheme offers first-time home buyers an exemption from transfer duty for purchases of new and existing homes up to $800,000 and a concessional rate of duty for homes up to $1,000,000.
If you want to purchase land on which you intend to build a home, you may receive an exemption for land valued up to $350,000 and a concessional rate for land valued over $350,000 and less than $450,000.
If you’re a first-time buyer hoping to purchase property in Sydney or elsewhere in NSW, check out the OwnHome NSW stamp duty calculator.
If you’re a Victorian first-time buyer, the VIC government offers a stamp duty exemption on new or existing properties valued up to $600,000, as well as a concession on homes worth up to $750,000.
If you’re a first-time homebuyer looking in Melbourne or elsewhere in VIC, check out the OwnHome VIC stamp duty calculator.
First-time buyers in Queensland can apply for a QLD stamp duty concession. Qualifying properties can be new or existing but must be worth less than $550,000. First-time buyers purchasing land can claim a fee exemption for vacant land valued at less than $400,00.
Queensland also offers general stamp duty concessions, so if you have your heart set on a property above these thresholds, you could still save on stamp duty.
● Western Australia
Those looking to get their foot in the door of the WA property market can expect to skip WA stamp duty on homes - new or existing - with a dutiable value under $430,000, as well as vacant land worth less than $300,000. For homes, stamp duty is payable at a concession rate of $19.19 for every $100 your property value is above $430,000, going up to $530,000. For vacant land, a concessional stamp duty rate of $13.01 for every $100 over $300,000 applies up to a value of $400,000.
● South Australia
At this time, the South Australian gov does not offer stamp duty concessions or exemptions for first-time home buyers. SA does have a SA first-time buyer grant available for those purchasing a new-build house or apartment.
For first-time buyers looking to settle in Australia’s capital territory, there are ACT stamp duty exemptions on new homes and vacant land. There is no required stamp duty on new homes worth less than $470,000, and concessions are available on new-build homes valued between $470,000 and $607,000. If you’re looking to build a principal place of residence on a piece of vacant ACT land, you will be charged $0 in stamp duty up to the value of $281,200. Concessions are then available up to $329,500.
● Northern Territory
Currently, the Northern Territory government does not offer stamp duty concessions or exemptions for first-time home buyers. That said, those looking to buy in NT are not forgotten. You can apply for a $10,000 bonus under the Northern Territory’s First Home Owner Grant Scheme, which could go a long way towards offsetting those upfront fees.
Tasmania does not offer any stamp duty exemptions for first-time home buyers. But, the TAS state government does offer a duty concession of 50% on first properties valued under $600,000.
Interested in getting started on the road to homeownership? Check out our Buying Power Calculator to get an idea of the maximum you could spend on a property.