Home loan guide
There’s more to it than you think
Stamp duty can significantly increase upfront costs for Australian first home buyers, often amounting to tens of thousands of dollars. Understandably, many first home buyers wonder: Can a home loan cover stamp duty?
Yes, a home loan may help fund stamp duty if the lender approves the total borrowing and security. The limit usually comes down to your deposit or equity, the property valuation and what you can repay. Duty does not add to the value of the property securing the loan.
Start with our stamp duty calculator to estimate duty for your state and purchase. Then compare your savings and approved loan with the total cost, and have your solicitor confirm the duty payable.
Stamp duty, also referred to as transfer duty, is a government-imposed tax that you must pay when purchasing property or land in Australia. It's one of the most significant upfront costs buyers face during the home-buying process, and understanding how it works is essential for planning your finances.
The amount of stamp duty you'll pay isn't fixed across the country. Instead, it varies by state or territory, with each having its own calculation methods, thresholds, and exemptions. Generally, the value of the property is the biggest factor determining how much duty you'll owe, the more expensive the property, the higher the stamp duty. Some states also consider the type of buyer you are. For example, first home buyers may qualify for discounts or even full exemptions, while investors and foreign buyers often pay more.
The payment deadline depends on the state and transaction. Your solicitor or conveyancer should confirm when duty and cleared settlement funds are due. Do not assume you can pay after settlement.
Include duty, registration, legal fees, inspections and moving costs in the budget. Check concessions before counting duty as a cost: an eligible first home buyer may owe $0.
Stamp duty is essentially a transaction tax. It's levied by state and territory governments as a way to generate revenue from the transfer of ownership in property. The funds raised typically go toward infrastructure, healthcare, education, and other public services in the region.
While it can feel like a financial hurdle, stamp duty has been a long-standing part of the property market in Australia.
Read more: First home buyer stamp duty
There is no universal rule banning loan funds from covering duty. The constraint is usually how much the bank will lend against the available property security, along with what you can afford to repay.
For example, a lender approving a 90% loan on a property valued at $700,000 may lend $630,000 before any permitted financed fees. You still need the remaining $70,000 towards the price, plus duty and other costs. Spending part of that $70,000 on duty leaves a shortfall unless the lender approves another arrangement.
An existing homeowner may be able to use an approved equity loan for buying costs. Bankwest's guide to using equity explains this option. A first home buyer may have different low-deposit or guarantor options, with their own requirements and risks.
Borrowing for stamp duty can reduce the cash you need upfront, but it increases your debt and interest costs. Compare both before deciding.
An approved loan structure may let you buy without first saving the full duty amount in cash. Compare the extra borrowing cost with your budget. Property prices can rise or fall, so a past growth figure is not a reason to rush a purchase.
Using a home loan to cover stamp duty can preserve your emergency fund. Having cash on hand gives you a financial buffer for unexpected costs like repairs or job changes. Many borrowers prefer to keep 3 to 6 months' worth of expenses in savings rather than draining every cent upfront.
Borrowing more may leave cash available for moving or urgent repairs. Check the repayments using your current reliable income rather than an expected pay rise.
At a constant 6% over 30 years, an extra $25,000 borrowed adds about $150 a month in principal-and-interest repayments. Total repayments are about $53,960, including $28,960 interest. These are hypothetical calculations with monthly repayments and no fees or rate changes.
Use the mortgage calculator to test another rate or repayment period.
Adding stamp duty may push your loan-to-value ratio (LVR) above 80%, which can trigger LMI. LMI can add thousands of dollars in costs and doesn't protect you, it protects the lender. Before borrowing extra, check how it affects your LVR and whether you can avoid LMI with a larger deposit or guarantor.
Some lenders see higher LVR loans as higher risk. This can lead to higher interest rates or stricter approval conditions. A mortgage broker can compare lenders to help you find the most flexible option if you're adding stamp duty to your mortgage.
Borrowing for stamp duty lowers your initial equity. This means you'll own less of your home from day one and take longer to reach 20% equity. Lower equity can make refinancing or selling early more difficult, especially if property prices fall.
Including your stamp duty in your mortgage can help you buy a home faster and protect your cash flow, but it comes at a cost. If you decide to go this route, compare lenders carefully, factor in LMI and interest, and get advice from a qualified mortgage broker to make sure it fits your long-term goals.
Check to see if you are eligible for a home loan
Savings often pay both the contribution towards the price and buying costs. Using more savings for duty leaves less for the price. The lender must approve any larger loan needed; the adjustment is not automatic.
For example, $50,000 savings less $15,000 duty leaves $35,000 before other costs. Whether that is enough depends on the price, valuation and approved loan limit.
Check the minimum contribution after duty and all other costs. LMI does not make every deposit shortfall acceptable. Our deposit calculator and LMI calculator help separate the budget items.
This is a hypothetical budget, not a client approval. Assume an $850,000 established Queensland home, $50,000 savings, eligibility for the ordinary home concession and no foreign surcharge.
| Item | Amount |
|---|---|
| Savings | $50,000 |
| Transfer duty with the ordinary home concession | $24,100 |
| Savings left before other costs | $25,900 |
| 5% contribution towards the price | $42,500 |
| Shortfall against 5%, before other costs | $16,600 |
The remaining $25,900 is about 3.05% of the price. It does not meet a 5% deposit, and legal and registration costs still need funding. More cash, a lower price or an approved alternative security structure would be needed.
The duty uses QRO's home concession rates. An eligible new first home can have a different duty result.
Stamp duty concessions can reduce or remove the duty on an eligible purchase. Check the rules for your state and property before including the saving in your budget.
Stamp duty concessions can greatly improve the affordability of your first home. Each state and territory has different rules, thresholds, and exemptions. Understanding these variations helps you plan your budget, maximise savings, and get into your home sooner.
Eligible homes up to $800,000 attract $0 duty. A concession applies above $800,000 and below $1 million. Vacant land has separate $350,000 exemption and $450,000 upper concession thresholds. These rules apply to eligible transactions from 1 July 2023.
Check the official New South Wales (NSW) eligibility rules.
Eligible first homes up to $600,000 attract $0 duty, with a concession from $600,001 to $750,000. Ownership, citizenship or residency and occupation requirements also apply.
Check the official Victoria (VIC) eligibility rules.
Eligible established first homes attract $0 duty up to $700,000. The first home concession reduces above that value and ends at $800,000; the ordinary home concession may still apply. Qualifying new first homes and vacant land for a first home have no value cap for contracts from 1 May 2025. From 1 August 2026, claimants must be Australian citizens, permanent residents or specified foreign retirees, as well as meeting the other conditions.
Check the official Queensland (QLD) eligibility rules.
For eligible transactions from 7 May 2026, homes are exempt up to $600,000, with a concessional rate to $800,000. Land is exempt up to $450,000, with a concessional rate to $550,000. These duty thresholds differ from the cash-grant value caps.
Check the official Western Australia (WA) eligibility rules.
Eligible new homes and vacant land to build a first home can receive full duty relief without a value cap for contracts from 6 June 2024. Established homes do not qualify. Previous-ownership and residence tests apply, including the changed ownership rules for contracts from 13 February 2025.
Check the official South Australia (SA) eligibility rules.
The established-home exemption for eligible purchases up to $750,000 covered settlements through 30 June 2026. It is not available for transactions settling after that date. Check any other exemption against your circumstances rather than assuming every first home receives relief.
Check the official Tasmania (TAS) eligibility rules.
For eligible HBCS transactions from 1 July 2026, duty is $0 with no income or property-value cap. Buyers and domestic partners generally must not have owned property anywhere in the world in the previous 5 years, subject to exceptions. At least one buyer must meet the residence requirements, generally 12 continuous months starting within the required 12-month period. Earlier transactions use earlier rules.
Check the official Australian Capital Territory (ACT) eligibility rules.
There is no general first-home duty discount. A separate exemption covers qualifying house-and-land package contracts with a building contractor from 1 July 2022 to 30 June 2027. It does not automatically cover an ordinary established home or an independent land-and-build arrangement.
Check the official Northern Territory (NT) eligibility rules.
Get the duty estimate early so you can assess the buying budget before making an offer.
Get an actual duty estimate and quotes for registration, legal work and inspections. A blanket allowance of 5% of the price can overstate or understate the cost. Our first-home duty guide and buying-cost guide explain what to include.
The Australian Government 5% Deposit Scheme may remove LMI for eligible buyers. It does not pay your duty or deposit. There are no current income caps, but price caps, ownership and residence requirements and lender approval still apply.
Cash grants and duty relief have separate rules. Queensland's $30,000 new-home grant continues for eligible contracts from 1 July 2026 and requires a total value below $750,000. Check the grants guide and official deposit scheme.
Keep the price contribution and buying costs separate in your budget. If duty leaves too little cash for the lender's minimum contribution, simply increasing the requested loan may exceed the maximum LVR. Have the whole purchase assessed before signing.
A genuine family gift may help, with evidence that repayment is not expected. A family loan must be disclosed as a debt.
Check with the home lender before taking a personal loan for buying costs. Its repayments can reduce borrowing capacity or change an existing approval. New debt is not a reliable way to fix a deposit shortfall.
If your budget feels tight, it might be worth waiting another 6 to 12 months.
During that time, you can:
Even a few extra months of saving can make a big difference to your long-term financial comfort.
A family guarantor, usually a parent, can help you buy sooner and avoid LMI. They use a portion of their property's equity to secure part of your loan.
Additional guarantor security may help meet the lender's security requirements and leave more of your savings available for buying costs. It does not reduce the amount you borrow or increase your equity in the property you are buying. The guarantor takes on financial risk, so both parties should obtain independent legal and financial advice.
A lower agreed price may reduce the cash needed, but duty can still use market value where it is higher. Disclose rebates and incentives to the lender and solicitor; they can affect valuation, lending and the duty assessment.
It's tempting to stretch for your dream home, but overcommitting can lead to stress later. Work out your true all-in budget, including stamp duty, moving costs, and legal fees, before setting your property price range.
Making decisions based on total affordability, not just your borrowing limit, keeps your finances healthy from day one.
A broker can assess the price, savings, loan limit and ongoing repayments together. Your solicitor or conveyancer confirms the legal duty claim and payment deadline.
Our NAB and CommBank reviews explain loan features to compare. State duty rules apply separately from the lender's policy.
Our home loan features guide explains offsets, redraw and extra repayments if you want to reduce the interest cost of additional borrowing.
Borrowing may help fund duty, but only within an approved loan and security structure. Check the total cash requirement and repayments before committing. A borrowing-capacity estimate alone does not close a deposit shortfall.
Would you like to learn about your situation?
Possibly, if the lender approves the total borrowing and security. It depends on your deposit or equity, valuation, income and the loan product. Do not assume the bank will add duty above its maximum loan limit.
Yes. More debt against the same property value raises the LVR. That can trigger LMI, change pricing or exceed the lender's limit. An approved waiver or additional security may change the outcome.
There is no universal lender answer. Compare the total purchase funding, acceptable security, maximum loan, LMI treatment and repayments for your circumstances. A general borrowing estimate is not approval for a particular structure.
It depends on the extra amount, rate, term and repayments. For example, $25,000 at a constant 6% over 30 years with monthly principal and interest repayments costs about $28,960 in interest, excluding fees. Paying it back sooner can reduce that cost.
Provide income and expense evidence, debts, savings and deposit-source records, the contract, property details and any concession evidence. Existing-property equity or a guarantor requires additional lender checks.
Do not assume so. Deadlines differ by jurisdiction and transaction. Your solicitor should confirm the assessment, payment deadline and cleared funds required before you sign or settle.
Send Hunter Galloway your price range, savings and buying location. We can check the lending options while your solicitor confirms the duty treatment.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
