The Guide - Building

Stamp duty and new homes


So, your application for that home loan has been accepted and you’re ready to start seriously shopping for your new home. Congratulations! That’s awesome! Stamp Duty is the opposite of awesome and has to be understood and accounted for because it often adds thousands to the cost of new homes.

No one loves it, but like all taxes, Stamp Duty is there and we all have to live with it. Make sure you understand the amount of Stamp Duty that will be applied to the new home you are planning to build. Be informed, apply it to your budget and you'll be fine.


What is Stamp Duty?

This is a government tax and extra fee that is applied to the transfer of property, including real estate and home loans. It is added to the cost / price of the home loan or any fees charged by the lender and is paid by the buyer or borrower (that’s you, sorry).

How much Stamp Duty will you be paying?

This varies from case to case, and from state to state and depends on a few different factors. Some of these include:

  • The state you live in, because some states charge more Stamp Duty than others, although the differences are not significant.
  • A major factor is the cost of the home and generally, if your home is worth more than $500,000 the Stamp Duty will be quite significant.
  • The amount of Stamp Duty will vary depending on the type of home you build or buy and a newly built home will attract less stamp duty than buying an existing home.

You can find Stamp Duty calculators online and work out accurate figures for your situation.

First Home Buyers and Stamp Duty

The good news for First Home Buyers is that every state has a first-time buyer concession to make it easier for the first timers to enter the market and build or buy their first home. The generosity of this concession varies from state to state.

WA is very generous to First Home Buyers and only applies Stamp Duty to new home purchases over $500,000 and land purchases over $300k. So, most first time builders / buyers in WA won’t have to pay the Stamp Duty tax. That’s good news!

How to calculate Stamp Duty

While Stamp Duty varies from state to state, you only need to worry about how the tax works in the state you’ll be building your new home in.

There are a few factors that dictate how the Stamp Duty will be applied including the price of the property, whether it is for investment or to live in, for a first home buyer or not, and the actual loan amount.

Each state and territory sets the rate at which they will charge stamp duty as well as how they calculate it for each property purchased in their local governance.

For most of our states and territories (NSW, QLD, TAS, VIC, NT and WA) Stamp Duty is calculated based on the greater amount between the actual price paid for the property and the market value of the property. For example, if your home is valued at $450,000 but you paid $475,000, stamp duty will be calculated based on the $475k purchase price.

In the ACT, Stamp Duty is also based on the higher amount between purchase price or market value. This is the total amount of the house and land when the land already has a home on it or a house and land package has been bought where the home is to be built on the land purchased before settlement. If you purchase land and then opt to build on this land at another time with a separate contract for the build, you will only be charged Stamp Duty on the land value / purchase price.

For people living in SA, Stamp Duty is calculated based on the value of the land including improvements or the price paid for the property including GST, whichever is greater unless there are applicable exemptions, concessions, rebates or reductions.