What is Stamp Duty, and How Much is Payable?
Stamp duty is a tax charged by State and Territory governments on the purchase of property. It is not a single national number — each State and Territory runs its own formula, and the amount you pay turns on where the property sits and what it sold for. Because the rate generally scales with the purchase price, a modest change in price can move the duty more than people expect.
The practical effect is that stamp duty is usually the largest upfront cost after your deposit. A reasonable rule of thumb is to set aside roughly five per cent of the purchase price to cover duty plus the other costs of completing a purchase — conveyancing, registration and the like — though the true figure depends entirely on your State's scale and which concessions apply to you.
Concessions, Grants and First-Home Buyers
Most jurisdictions offer concessions for first-home buyers, and they vary widely: outright exemptions below a price threshold, partial discounts on a sliding scale, or extended periods to pay. Owner-occupiers, off-the-plan purchases and certain property types can attract their own treatment as well. The eligibility rules and thresholds change from State to State and are revised from time to time, so the concession that applied to a friend last year may not be the one that applies to your purchase.
It is worth checking two things specifically: whether your State charges mortgage stamp duty on the loan itself, and whether you fall inside a subsidy, grant or exclusion category. Those answers can shift the cash you need at settlement materially.
Can You Borrow the Stamp Duty?
Whether you can add stamp duty to your loan rather than paying it from savings is a policy question, and it depends on your mortgage product and the numbers behind it.
The figure that governs this is the capitalised loan-to-value ratio (LVR) — the loan measured against the property value once costs such as Lenders Mortgage Insurance (LMI) are folded in. If capitalising duty and LMI keeps you inside a lender's acceptable LVR, you may be able to roll those costs into the loan rather than funding them upfront. The trade-off is real: borrowing the duty and the LMI increases the loan, lifts your monthly repayments, and can reduce your borrowing capacity elsewhere. Whether that trade serves your plan is the part worth thinking through before you commit, not after.
Stamp Duty is Complex, and Reform is Slowly Coming
Stamp duty is an old tax. The name comes from an era when documents were physically stamped to make them official, and the duty has carried forward into the modern property system largely because it has long been a dependable source of government revenue. For years there has been a strong argument that stamp duty should give way to a broader land tax — a charge spread over time rather than levied in one hit at purchase. Several jurisdictions are moving in that direction, in some cases letting buyers choose between the two, so the system is reforming gradually even if the duty itself is still very much with us.
For now, each State and Territory keeps its own duty regime, complete with thresholds, sliding scales, exemptions and grants that may or may not apply to your situation. Getting an accurate figure means working from your actual purchase price, location and eligibility — not a general estimate. If you want to know what stamp duty will genuinely cost on the property you have in mind, and how it fits your deposit and loan structure, that is worth mapping properly before you make an offer.
Book a strategy session and we will work through the real numbers for your purchase.
General information only — not personal financial product or credit advice. Stamp duty, concessions and grants are set by each State and Territory and are subject to change; confirm current rates and eligibility with the relevant revenue office or your conveyancer. AeFin is an Australian Credit Representative (CR 464548) of Finsure (ACL 384704).