August 2025 – Hannah Phelps
Transfer duty (stamp duty) is a significant cost for anyone purchasing or transferring property in New South Wales (NSW). It applies not only to residential and commercial purchases but also to certain transfers between family members.
When is transfer duty payable?
In most cases, transfer duty must be paid within three months of signing the contract or on settlement, whichever occurs first. An exception applies for off the plan purchases, where payment can be deferred for up to 15 months from the contract date or until settlement, whichever happens first.
First Home Buyer Concessions
Eligible first home buyers in NSW pay no transfer duty on properties up to $800,000, and receive a concessional rate on properties valued between $800,000 and $1,000,000. These concessions can significantly reduce the financial barrier to home ownership.
Premium Property Duty
For high value transactions, premium transfer duty applies. This higher rate is triggered on properties valued over $3,721,000 and increases the duty payable considerably.
Transfers Between Family Members
Transfer duty also applies to family transfers, including when property is gifted. Even if no money changes hands, duty is still calculated based on the current market value of the property. Parties are required to obtain a formal valuation from a registered valuer to determine the duty payable. There are limited exemptions and concessions, such as transfers between spouses, but these are strictly defined. Each situation must be assessed individually, and legal advice is essential to ensure compliance and avoid penalties.
Foreign Purchaser Surcharge
Foreign buyers of property in NSW are subject to an additional 9% foreign purchaser surcharge on top of standard transfer duty. This surcharge applies to individuals, companies and trusts classified as “foreign persons” under NSW legislation. The surcharge cannot be offset by first home buyer concessions.
Transfer duty can significantly affect the cost of acquiring or transferring property in NSW and the rules vary depending on factors like property value, buyer status and the type of transaction. Whether you’re a first home buyer, transferring property within your family or purchasing as a foreign person, seeking legal advice can help you understand your obligations, avoid costly surprises, and take advantage of any exemptions or concessions available.
For tailored guidance on how transfer duty may apply to a property transaction, contact our experienced property law team today.