Stamp duty (Also known as transfer duty) is one of the critical things First Home Buyers in Australia need to understand about buying their first home.
In this guide, we’ll walk you through everything you need to know about stamp duty for first-home buyers.
So if you want to:
Know if you have to pay stamp duty in 2024
Understand stamp duty concessions for first-home buyers in your state
Figure out borrowing around stamp duty
Know what happens if the property is already rented with a tenant?
Then you’ll love this new guide.
Let’s get started.
What stamp duty discounts do first home buyers In Australia get?
In this section, we will cover the stamp duty discounts that First Home Buyers in Australia are eligible for, including how it works and the differences in 2024.
We will also show you how first-home buyers can receive concessions and discounts.
What Is Stamp Duty?
Stamp duty is a tax implemented by the government for any sale or transfer of land. It varies between states and territories, and the money goes towards infrastructure, health, police and emergency services.
The price of stamp duty has gone up in Australia as house prices have gone up.
How does the cost of stamp duty vary?
The price of stamp duty varies from state to state but is usually dependent on the following factors:
The total value of your property (land and the house)
Your income and dependants
Whether or not you are going to live on the property
The type of property, e.g. existing house, off-the-plan purchase or vacant land
Stamp duty can be a massive burden on buyers in Australia. Sometimes, it feels like just as much money as the deposit you need to save.
For example, if you want to purchase a house that is $450,000, you will need an 8 to 10% deposit, which is about $45,000. You will also need to pay an extra $1,365 in Queensland for stamp duty.
Or if you’re in ACT, an additional $10,262… ouch!
The good news is that First Home Buyers are offered different concessions depending on their state.
What Is Stamp Duty Concession?
Stamp duty concession is the discount offered to first-home buyers by the government. These discounts are meant to reduce the cost of buying a home and allow homebuyers to enter the market faster. The eligibility criteria for stamp duty concessions differ from state to state.
You need to fulfil a specific criterion to be eligible for the First Home buyers stamp duty concession in Queensland.
(Don’t worry; we cover the other states like NSW and VIC below)
So In QLD, you’ll be eligible for the first home buyers stamp duty discount if you:
You are over 18 years of age
You have never owned land or a residence in Australia or overseas
You will live in the property daily within one year of settlement
You will not move possession of the property into someone else’s name before you move in
You will pay market value if the property is between $500,001 and $549,999
Read More: Stamp Duty Calculator Queensland
Stamp Duty Discounts
How are first-home buyers eligible for the stamp duty rebate?
The government has provided a series of concessions to reduce part or all stamp duty costs to assist first-home buyers in getting into the property market.
Stamp Duty Discounts By State
In this section, we will go through the different stamp duty discounts per state.
Queensland Stamp Duty Discounts
The premier has just announced in Queensland that we’re going to have some massive overhauls to the stamp duty concessions for first-home buyers. Under the previous scheme, stamp duty would be waived for houses valued at $500,000 or below. This just hasn’t kept up with the price growth that we’ve seen over the last couple of years. As of the 9th of June 2024, the stamp duty waiver for first-home buyers is being lifted for homes valued under $700,000. This is a very welcome change, especially since the stamp Duty concession for first homeowners had been at 500,000 for over 10 years.
The new stamp duty threshold is a massive change because previously, if you were buying a home for $700,000, you would pay just under $20,000 in stamp duty. But now you can save that money and potentially borrow less on a home up to $700,000. You could also use the waiver with the Home Guarantee scheme to buy a home for $700,000 with only a $35,000 deposit! This might give you a lot more budget and capacity to buy something you would prefer — it’s the difference between a one-bedroom or two-bedroom apartment in the current market.
The new stamp duty concession also applies to land. So, if you’re buying vacant land, the concession has increased from $250,000 to $350,000 and will phase up to $500,000.
To be able to fund this the government is increasing the foreign investor surcharge to 8%, which is in line with New South Wales and Victoria. The foreign investor surcharge is applicable if you are a non-resident. If you’re a citizen and you’re buying in Queensland with your spouse or your partner who is on a temporary visa, you will have to pay that non-resident or foreign investor surcharge for half of the title because that partner on the 820 or the 800 Visa is a non-permanent resident. Get some advice from your lawyer solicitor if this applies to you because that surcharge increase is pretty hefty.
What if I signed a contract of sale before the 9th of June 2024?
If you signed your contract for $611,000, say a week before the 9th of June, you could still be in your finance clause, but there could be $13,000 in stamp duty, which is applicable. This is where it gets tricky, and the best option is to get legal advice. If you cancel the contract while still under your Finance Clause, the seller could try to resell the home, and you could be at risk here. Talk to your solicitor to really understand what the ramifications are if you cancel the contract and enter a new one.
Basically, if your contract was dated before Sunday, June 9th, 2024, you’re not eligible for the stamp duty waiver.
New South Wales Stamp Duty Discounts
On 11 November 2022, NSW approved the Property Tax (First Home Buyer Choice) Act, which gives first-home buyers the option to pay stamp duty upfront or an annual property tax instead. The good news is this applies to properties up to $ 1.5 million!
The current first-home stamp duty concessions still apply. This means first-home buyers are exempt from paying stamp duty for homes up to $650,000 and are eligible for discounts up to $800,000.
You can also apply for a transfer duty refund if you paid transfer duty on a contract of sale that doesn’t go ahead.
Read More: NSW Office of State Revenue
Victoria stamp duty concessions
The Victorian government has a few more rules, but there are still stamp duty exemptions.
If you purchased a home after 1 July 2017 and your house is valued at $600,000 or less, you will be exempted from paying stamp duty.
However, if the value is between $600,001 to $750,000, you will only be eligible for a discount on stamp duty.
The government is also offering temporary concessions for those who might not meet the eligibility criteria for the standard concessions:
If you signed a contract on or after 25 November 2020 and before July 2021, you might be eligible for a duty waiver if the property has a value of up to $1 million.
You can get a full waiver or full concession on stamp duty if your property is located within the City of Melbourne local government area and is valued at up to $1 million.
Read More: VIC First Home Buyer Stamp Duty
Australian Capital Territory Stamp Duty
Australian Capital Territory (ACT) has many more rules regarding stamp duty concessions.
The good news is that all properties in the ACT are eligible for stamp duty concessions – there is no price cap on the property you can buy. But there is a cap on the total amount of concessions you can receive. From 2023 to 2024, you can only receive a maximum of $34,504 in concessions.
They also have income thresholds to determine your eligibility for the concessions. In other words, if you earn more than the figures below, you will not be eligible for stamp duty concessions:
Dependant Children | Gross income threshold |
0 | $170,000 |
1 | $173,330 |
2 | $176,660 |
3 | $179,990 |
4 | $183,320 |
5 or more | $186,650 |
These thresholds apply to transactions made from 1 July 2022 onwards. Different income thresholds apply to contracts signed between 1 July 2019 and 30 June 2022.
Complete the survey here.
Read More: ACT Stamp duty for First Home Buyers.
Northern Territory Stamp Duty
Unfortunately, The First Home Owner Discount ceased on 6 May 2019.
However, if you bought an established home up to the value of $650,000 on or before this date, you can still apply for up to $23,928.60 off stamp duty.
If you bought an established home after 6 May 2019, you might be eligible for the Territory Home Owner Discount. You can get up to $18,601 off stamp duty.
If you are buying a brand new home, you may be able to apply for a first homeowner grant instead.
Read More: Stamp duty calculators Northern Territory.
Western Australia Stamp Duty
In Western Australia, you don’t have to pay stamp duty if the property value (the house and the land) does not exceed $430,000. However, you can still get stamp duty discounts if the property value does not exceed $530,000.
Read More: Stamp duty in Western Australia
South Australia
The bad news for those in South Australia is that the government stopped stamp duty concessions in 2018. Therefore the standard rates of Stamp Duty apply. You can use their stamp duty calculator to see how much you have to pay.
Tasmania stamp duty
Sorry Tassy First Home Buyers, there are no concessions or exemptions for those purchasing their first home in Tasmania at the moment.
Read More: Stamp duty for first home buyers in Tasmania.
Can stamp duty fees be added to my loan?
Now it’s time to figure out how to pay for stamp duty.
Specifically, we will discuss if stamp duty can be added to your loan and how it needs to be paid.
Can I borrow money from my loan to pay for stamp duty.
Technically, no.
The correct way to pay for stamp duty is to use the money from your deposit.
When you take the money out of your deposit, this will then reduce your overall deposit. So you’ll need to borrow more from your lender to fill in this difference. This is why a deposit of at least 10% is recommended when buying a property.
Speak to our team of expert mortgage brokers about your budget, costs and fees around purchasing a property to see what is in line with what you can afford.
When will my stamp duty rebate come through?
In Queensland, the rebate will be calculated before settlement. The costs of buying will be reviewed, including rates and stamp duty, and the rebate will be determined.
It is up to your solicitor to notify you should you need to pay stamp duty and the exact amount before settlement.
You will then be required to give the funds to them or have the money ready in your bank.
What if the property is already rented by a tenant?
Now we will show you how to get the most out of your purchase, even with current tenants on the property. We’ll also figure out when the stamp duty rebate will come through.
Am I eligible for the rebate if the property is already rented?
In many cases, people sell homes and allow the tenants to continue renting the property. They might be on a lease, meaning you can’t kick them out because you want to move in.
If you’re buying a home with tenants already on the lease, you can work around it by allowing the current tenants to stay in the property for up to 6 months after settlement or until the lease end date—whichever occurs first.
After this, you are required to move in, and you must stay in the property for 12 months consecutively to claim the rebate. However, this differs from state to state.
It’s best to check with your solicitor or conveyancer to make sure this is possible in your situation.
How can having tenants work in your favour?
If you have a current tenant in the property and are in no rush to move in, you might be allowed to let them stay there.
If the landlord is currently living in the home and is selling due to financial stress, you can use it as a helpful negotiation strategy. Allowing them to move out a little later will take the pressure off the move for them, and you will get rent money for another 5 months!
Quick reminder: The specific rules about this vary from state to state, so check with your local office of state revenue or conveyancer before going down this path.
Next steps and getting your home loan
Are you ready to buy a home?
Our team at Hunter Galloway is here to help you buy a home in Brisbane. Unlike other mortgage brokers who are just one person operations, we have an entire team of experts dedicated to help make your home loan journey as simple as possible.
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.
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