Stamp duty in NSW is one of the biggest upfront costs when buying a home—but first home buyers may be eligible for major savings or even a full exemption through the First Home Buyers Assistance Scheme. In this updated 2025 guide, we’ll break down how stamp duty works, who qualifies for exemptions and discounts, the current duty rates, and how much you can realistically expect to save. We’ll also cover key topics, such as foreign buyer surcharges, shared ownership rules, and duty on option purchases—so you’re fully equipped before signing any contract.
Stamp Duty NSW - What Is It?
Stamp duty (also known as transfer duty) is a tax you must pay to the NSW government when a person transfers ownership of a property to you. You must pay transfer duty when buying any of the following types of property:
- The home you are going to live in
- A holiday home
- An investment property
- Vacant land
- Farming property
- A business that includes land in the purchase
- Commercial property
Stamp duty is assessed on the ‘dutiable value’ of the property, which is the greater of the purchase price or the market value at the time of the transaction.
There are certain situations where you may be eligible for a stamp duty discount or exemption:
- When you inherit the property
- When the property is transferred between a married or de facto couple
In New South Wales, you must pay transfer duty within three months of the contract signing date or by settlement, whichever comes first. Paying late incurs penalties and interest, which increase the longer you delay. Most buyers pay through their conveyancer or directly to Revenue NSW to ensure the process is smooth and on time.
However, if you are buying off-the-plan, you may be able to defer your transfer duty by up to 12 months.
As we have mentioned, stamp duty is one of the most expensive hidden costs of buying a home. However, if you are a first home owner, you can take advantage of the First Home Buyer Assistance Scheme.
First Home Buyers Assistance Scheme
Under the First Home Buyers Assistance Scheme, eligible first home buyers may receive exemptions or concessions on stamp duty, provided they meet specific criteria set forth by Revenue NSW.
Eligibility Criteria
To be eligible for the scheme:
- You must be 18 years or older
This ensures applicants are legally able to enter property contracts and take full responsibility for homeownership. - Be an Australian citizen or permanent resident
The scheme supports residents who contribute to the local economy and plan to live in Australia long-term. - If applying as a couple, at least one must be a citizen or permanent resident
This requirement ensures that the home is primarily for eligible residents rather than temporary visitors. - The property must be an existing home, a new build, or vacant land
The rule encourages genuine homeownership and supports housing supply in NSW. - Must transfer the entire property, not part of it
This prevents partial ownership arrangements that could be used to exploit concessions. - Companies and trusts are not eligible
The scheme targets individuals and families, avoiding use by investors or corporate entities. - You or your partner must never have owned property in Australia
This keeps the benefits focused on genuine first-home buyers rather than repeat buyers. - You must not have used the scheme before
The rule ensures the scheme benefits new buyers, avoiding repeated access by the same individuals. - You must move in within 12 months and live continuously for 12 months
This ensures the scheme supports owner-occupiers rather than investors seeking a financial advantage. - ADF members are exempt from the residency requirement if on the NSW electoral roll. This acknowledges service members’ mobility and allows them to benefit while fulfilling duties.
CRITICAL WARNING: The Spouse/Partner Rule. FHBAS eligibility depends on the property history of both you and your spouse or de facto partner. If your partner has ever owned or co-owned residential property anywhere in Australia, you will be ineligible for the scheme, even if they are not on the title of the home you are buying. This rule is a common trap for many buyers.
Property Price Caps
As of 1 July 2023, the NSW Government increased the property price caps under the First Home Buyers Assistance Scheme (FHBAS). These updated thresholds make it easier for first home buyers to access stamp duty exemptions and concessions, whether purchasing a brand new home, an existing property, or vacant land.
New and Existing Homes
- Homes valued at $800,000 or less: Eligible buyers receive a full exemption from stamp duty. This can save you more than $30,000 upfront.
- Homes valued between $800,001 and $1,000,000: A partial concession applies. The closer the purchase price is to $800,000, the larger the discount you’ll receive.
Vacant Land
- Land valued at $350,000 or less: You may be eligible for a full exemption from stamp duty.
- Land valued between $350,001 and $450,000: A discounted rate applies, with the concession decreasing as the land value approaches $450,000.
Remember, these exemptions and concessions are only available to eligible first home buyers. You must move into the property within 12 months of settlement and live there continuously for at least 12 months.
Contracts Signed Before 1 July 2023
If your contract was signed before 1 July 2023, the previous thresholds apply:
- Homes valued at $650,000 or less: Full exemption.
- Homes between $650,001 and $800,000: Concessional rate.
- Vacant land: The $350,000 full exemption and $350,001 to $450,000 concession still apply.
If you’re unsure which threshold applies to you, speak with an experienced mortgage broker
Stamp Duty Rates In NSW (2025 Updated Table)
Even if you’re not a first home buyer, it’s important to understand how stamp duty is calculated.
Stamp duty is calculated using a tiered rate system. The more expensive your property, the higher the percentage you pay. These rates apply whether you’re buying your first home, an investment property, or vacant land.
Here’s a breakdown of the 2025 standard stamp duty rates:
Property Value Range | Duty Payable |
$0 – $17,000 | $1.25 per $100 (minimum $20) |
$17,001 – $37,000 | $212 + $1.50 per $100 over $17,000 |
$37,001 – $99,000 | $512 + $1.75 per $100 over $37,000 |
$99,001 – $372,000 | $1,597 + $3.50 per $100 over $99,000 |
$372,001 – $1,240,000 | $11,152 + $4.50 per $100 over $372,000 |
Over $1,240,000 | $50,212 + $5.50 per $100 over $1,240,000 |
Example: Let’s say you’re buying a $1.2 million home. Your stamp duty would be $11,152 plus 4.5% of $828,000, which equals a total of approximately $48,412.
Understanding these rates helps you prepare better for all upfront costs.
Understanding Premium Duty on High-Value Residential Properties
When you buy a high-value home in New South Wales, you pay an additional premium rate of duty. Authorities update these thresholds every year, so staying informed helps you plan your purchase.
For stamp duty NSW, the current thresholds and rates for premium properties are:
- Financial year 1 July 2024 – 30 June 2025:
- Premium threshold: $3,636,000
- Duty: $182,389 plus $7 for every $100 above the threshold
- Financial year 1 July 2025 – 30 June 2026 (announced):
- Premium threshold: $3,721,000
Including the 2025–26 threshold helps home buyers plan future high-value transactions.
Why Premium Duty Can Be Tricky
Calculating premium duty can be confusing. Many guides ignore apportionment, which affects:
- Mixed-use properties (residential + commercial)
- Residential land over two hectares
Authorities apply premium duty only to the residential portion or a two-hectare equivalent.
Example:
A $10 million property has a 40% residential component ($4 million). You calculate premium duty only on the amount above the threshold within that $4 million, not the full $10 million.
Understanding apportionment helps buyers of mixed-use, rural, or large-scale residential properties calculate their stamp duty NSW correctly.
Foreign Buyers And Surcharge Purchaser Duty
Foreign purchasers may incur an additional surcharge on stamp duty, known as the Foreign Surcharge Purchaser Duty (FSPD), which is levied at an additional rate of 8% on the dutiable value of residential-related property acquisitions.
[IMPORTANT UPDATE: For contracts exchanged on or after 1 January 2025, this rate will increase to 9%.]
This applies whether you’re buying a new home, investment property, or vacant land.
Foreign buyers include people who are:
- Not Australian citizens
- Not permanent residents
- Not New Zealand citizens holding a special category visa
Example: Say you’re a foreign investor buying a $950,000 home. You’ll pay around $36,090 in regular stamp duty. On top of that, you’ll owe $76,000 in surcharge duty. That’s a total of over $112,000.
It’s important to check your residency status before committing to a purchase. You can also apply for exemptions in limited circumstances. Be sure to speak to your solicitor or mortgage broker.
How Much Will I Save With The Stamp Duty NSW Exemption?
Here are the likely savings based on purchase price examples in 2025:
Property Price | Type of Benefit | Estimated Stamp Duty Saving |
$700,000 | Full exemption | $20,530 |
$750,000 | Full exemption | $25,530 |
$800,000 | Full exemption | $30,529 |
$850,000 | Partial concession | $22,900 |
$900,000 | Partial concession | $15,260 |
$950,000 | Partial concession | $7,630 |
$990,000 | Partial concession | $3,060 |
The exact savings vary depending on sliding scale duty rates set by Revenue NSW
Other Benefits Of Stamp Duty Exemptions
- Faster access to home ownership: You can get into the market sooner without having to save a large lump sum for stamp duty.
- Financial flexibility: You may use the extra savings towards moving costs, furniture, or renovations.
- Wider suburb access: Higher thresholds allow first home buyers to consider suburbs where property prices hover around these caps. This includes areas such as Liverpool, Campbelltown, Parramatta, The Central Coast, and parts of Western Sydney—areas popular under the expanded scheme
Common Pitfalls When Paying Stamp Duty In NSW
Buying a property in New South Wales involves more than just the purchase price. Even experienced buyers can make mistakes that lead to unexpected costs.
Forgetting Lender’s Mortgage Insurance (LMI)
If your deposit is under 20%, lenders usually require LMI. Many first home buyers assume stamp duty is the only upfront cost. LMI can add thousands of dollars to your expenses. Always factor it into your budget.
Misunderstanding FHBAS Eligibility
Couples often misunderstand FHBAS rules. Both partners’ property histories are assessed. Failing to check this can result in losing access to first home buyer concessions.
Ignoring Discretionary Trust Rules
Properties purchased through discretionary trusts can trigger Special Purpose Duty (SPD). Misinterpreting the strict rules can increase your stamp duty unexpectedly. Always consult a conveyancer if trust ownership is involved.
Overlooking Additional Costs
Stamp duty is not the only upfront cost. Legal and conveyancing fees, mortgage registration fees, transfer registration fees, and building or pest inspections can all add up. Ignoring these costs can stretch your budget.
Timing Errors
Some exemptions and concessions are time-sensitive. Failing to lodge paperwork correctly or on time can forfeit valuable savings. Always plan your settlement timeline carefully.
Professional Tip: Budget for every possible upfront cost. Check eligibility rules thoroughly. Seek advice early. Small oversights can turn an exciting first home purchase into an expensive lesson.
Buying Property Through An Option Or Shared Ownership
Option Contracts
If you’re buying a property using an option contract, stamp duty still applies. You must pay duty when the option is exercised or assigned. This applies even if the buyer listed on the option differs from the final purchaser.
Let’s say you sign an option agreement today and nominate someone else to buy the property later. That person will still need to pay full stamp duty. The duty amount is based on the final purchase price or market value—whichever is higher.
Option agreements are useful, but they come with extra legal steps. Always speak to your conveyancer or mortgage broker before using one.
Shared Ownership
Buying property with another person? If only one of you qualifies as a first home buyer, the exemption won’t apply to both.
Let’s break it down. If your partner has already owned property before, their share of the property will be taxed. You can still apply for a partial exemption on your portion. But your partner will need to pay full stamp duty on theirs.
This rule also applies if you buy with a parent, friend, or family member. Make sure you understand how duty is split in shared purchases. This can save you from surprise costs at settlement.
Case Study: Stamp Duty NSW – How The FHBAS Spouse Rule Can Affect First Home Buyers
Background:
Jane and David, a couple in New South Wales, decided it was time to buy their first home. Jane had never owned property, making her a first home buyer. David, however, had co-owned a flat with his sibling five years earlier.
The Situation:
They planned to purchase a new home solely in Jane’s name, assuming this would allow them to qualify for the First Home Buyers Assistance Scheme (FHBAS) and access stamp duty concessions.
The Challenge:
Under NSW FHBAS rules:
- Eligibility is assessed for both partners in a couple.
- Any prior property ownership by either partner can disqualify the couple.
- Purchasing the property in only one partner’s name does not bypass the rule.
Outcome:
- Jane and David were ineligible for FHBAS concessions.
- They would need to pay full stamp duty on the purchase.
Key Lessons from This Case:
- Always check the property history of both partners before applying for first home buyer concessions.
- Relying on a single partner’s first home buyer status can lead to unexpected costs.
- Understanding FHBAS rules early can prevent surprises and help plan finances better.
Practical Tip:
Before purchasing, couples should:
- Verify past property ownership for both partners.
- Seek advice from a conveyancer or mortgage broker to confirm eligibility.
- Consider alternative strategies to minimize stamp duty if one partner is ineligible.
Conclusion:
This case study illustrates how the FHBAS spouse rule can impact stamp duty savings. By understanding the rules and reviewing both partners’ property history, first home buyers can make informed decisions and avoid costly mistakes.
Frequently Asked Questions (FAQs) About Stamp Duty In NSW
What is stamp duty in NSW?
Stamp duty—also known as transfer duty—is a tax charged by the NSW Government when you purchase property. It’s paid upfront and is one of the biggest costs you’ll face when buying a home.
How much stamp duty will I pay in NSW?
The amount you pay depends on the purchase price, whether you’re a first home buyer, and your residency status. For an accurate figure, it’s best to use the Revenue NSW stamp duty calculator.
Do first home buyers pay stamp duty in NSW?
If you’re a first home buyer and purchasing a home under $800,000, you may qualify for a full stamp duty exemption. For homes valued up to $1 million, partial concessions are available.
What are the 2025 stamp duty rates in NSW?
In 2025, rates start at 1.25% and go up to 5.5%, depending on your property’s value. Homes over $3 million attract a premium rate.
Can I get a stamp duty exemption as a foreign buyer?
Unfortunately, no. Foreign buyers not only pay standard stamp duty but also face an 8% foreign purchaser surcharge, with no exemptions available.
When is stamp duty due in NSW?
Stamp duty must be paid within three months of signing the contract. If you’re buying off the plan and intend to live there, you may be eligible for a 12-month deferral.
Is stamp duty different for investment properties?
No—investment properties are subject to the same rates as owner-occupied homes. However, investors are not eligible for first home buyer exemptions or concessions.
Do I still pay stamp duty if I buy with a family member?
Yes. Each buyer’s share is assessed separately. If only one is a first home buyer, the other will still be liable for their portion of stamp duty.
What happens if I buy under an option agreement?
You’ll still need to pay stamp duty, based on either the agreed purchase price or the market value—whichever is higher. Even if the buyer’s name changes later, the duty still applies.
Where can I get help calculating stamp duty?
You can use the official Revenue NSW calculator, or speak to a mortgage broker who can guide you through your stamp duty obligations and help you budget correctly.
Can I pay stamp duty in instalments?
Generally, no stamp duty must be paid in full by the due date. However, in limited hardship cases, Revenue NSW may approve a payment plan. It’s best to apply early and provide full documentation.
Do pensioners pay stamp duty in NSW?
There are no general stamp duty exemptions for pensioners in NSW. That said, if you’re a first home buyer pensioner and meet the criteria, you may qualify for concessions under existing first home buyer schemes.
What happens if I buy with a partner who has owned a home before?
If your partner has previously owned a home, you may lose first-home buyer concessions. You can still buy together, but the premium or full duty may apply. Each situation depends on your combined eligibility.
How is transfer duty calculated on a farm that includes a residence?
Authorities apportion the value between the residential and non-residential parts. Premium duty applies only to the residential portion or a two-hectare equivalent. You calculate duty based on that apportioned value.
Can my family trust buy a property without paying Surcharge Purchaser Duty?
Generally, family trusts must pay Surcharge Purchaser Duty on residential property. Some exemptions exist for special circumstances. You should check eligibility with Revenue NSW before buying.
Ready To Buy A Home In NSW?
Our team at Hunter Galloway is here to help you buy a home in NSW. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping making 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.
More Resources For Homebuyers:
Disclaimer
This article provides general information only. It does not give legal, financial, or tax advice. Stamp duty rules and exemptions can vary based on your individual circumstances. We recommend that you consult a qualified professional, such as a solicitor, conveyancer, or financial advisor, to get advice tailored to your situation.
Start again
