Property guide
Stamp Duty in NSW — How Transfer Duty Is Calculated
Transfer duty, commonly called stamp duty, is a state government tax on the transfer of property. In NSW it is one of the largest transaction costs in a property purchase — for a $1 million property, stamp duty is approximately $40,000. Understanding how it is calculated, what concessions are available, and how it affects your borrowing power is an essential step before making an offer.
How NSW transfer duty is calculated
NSW transfer duty is calculated on a progressive scale applied to the greater of the purchase price or the market value of the property. The 2025-26 rates are:
• $0–$16,000: $1.25 for every $100 of value • $16,001–$35,000: $200 plus $1.50 for every $100 over $16,000 • $35,001–$93,000: $485 plus $1.75 for every $100 over $35,000 • $93,001–$351,000: $1,500 plus $3.50 for every $100 over $93,000 • $351,001–$1,168,000: $10,530 plus $4.50 for every $100 over $351,000 • Over $1,168,000: $47,295 plus $5.50 for every $100 over $1,168,000
For a $1,000,000 property: $10,530 + ($1,000,000 – $351,000) × 0.045 = $10,530 + $29,205 = $39,735.
For a $1,500,000 property: $47,295 + ($1,500,000 – $1,168,000) × 0.055 = $47,295 + $18,260 = $65,555.
These calculations apply to standard residential property purchases. Foreign purchaser surcharge duty applies additionally for non-Australian citizens and permanent residents.
Premium duty threshold
A premium property duty applies to residential properties valued above $3,505,000 (the 2025-26 threshold, indexed annually). The duty on the amount above this threshold is 7% rather than 5.5%. For a $4 million property, the premium applies to approximately $500,000, adding about $7,500 over the standard rate.
When is stamp duty payable?
Transfer duty is payable within 3 months of exchanging contracts (unconditionally or conditionally). For off-the-plan purchases, the duty may be deferred until settlement or 15 months after exchange, whichever comes first — giving buyers of new apartments more time to fund the payment.
Stamp duty is typically funded from savings, not from the mortgage itself (though some lenders will consider capitalising duty into the loan in specific circumstances). Failing to account for stamp duty in your savings plan is one of the most common first home buyer mistakes.
First home buyer concessions
First home buyers in NSW receive full stamp duty exemption on properties up to $800,000, and a concessional rate on properties between $800,001 and $1,000,000. Above $1,000,000, no concession is available.
Additionally, first home buyers can elect to pay an annual property tax instead of upfront stamp duty on properties up to $1,500,000 (the First Home Buyer Choice scheme). See the First Home Buyer Schemes guide for full details.
To qualify for first home buyer concessions, you must not have previously owned or co-owned residential property anywhere in Australia or overseas, and you must intend to move in within 12 months and live there for at least 6 continuous months.
Stamp duty and your borrowing power
Stamp duty does not reduce your borrowing power in the sense that lenders assess serviceability on the loan amount, not the total purchase cost. However, it reduces the cash available for your deposit, which can affect your LVR and therefore whether you need to pay Lenders Mortgage Insurance (LMI).
For example, if you have $150,000 in savings and are buying a $900,000 property, a $32,000 stamp duty bill leaves you with $118,000 for deposit — 13.1% of purchase price. This triggers LMI (LMI applies below 20% LVR). If you were buying at $800,000 with a full first home buyer exemption, your $150,000 is all deposit — 18.75% LVR — you would still need LMI but a smaller amount.
Always model stamp duty and LMI together when assessing your total purchase cost, not just the purchase price and loan amount.
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