Stamp Duty, Grants & Costs Explained For Australian Property Buyers
Buying property in Australia costs more than the purchase price. Stamp duty is usually the largest additional expense, followed by legal fees, inspections and the lender’s mortgage insurance. First home buyers can offset part of this through grants and duty exemptions. Investors pay the full amount and take on costs that owner-occupiers avoid. Here is what each buyer type pays and where the rules change between states.
What costs do you pay when buying property in Australia?
Buyers face five main costs at purchase:
- Stamp duty, a state tax on the transfer of property
- Legal and conveyancing fees
- Building and pest inspections
- Lenders mortgage insurance if your deposit is under 20 per cent
- Loan application, registration and title transfer fees
Stamp duty costs dominate the list. On a median-priced home, the bill often runs to tens of thousands of dollars. The remaining items usually total a few thousand combined.
How is stamp duty calculated?
Stamp duty is calculated on the dutiable value of the property, which is the purchase price or market value, whichever is higher. Every state applies a progressive scale, so the rate climbs as the value climbs.
What percentage is stamp duty in practice?
Top marginal rates sit between roughly 5 and 6.5 per cent. The effective rate across the whole purchase is lower because the early brackets are taxed at less. Victoria’s scale starts at 1.4 per cent and reaches 6.5 per cent above $2 million.
How much is stamp duty on a typical purchase?
An owner-occupier buying at $750,000 in Victoria pays close to $40,000 in land transfer duty.
Stamp duty for land is worked out on the value of the block itself. Stamp duty for home purchases uses the house and land together. Investors pay the full scale with no concession, and foreign buyers pay a surcharge on top.
How stamp duty differs between states
Each state sets its own rates and its own first home buyer thresholds. The same purchase price produces a different bill in each jurisdiction.
- New South Wales — eligible first home buyers pay no duty up to $800,000, with a reduced rate of $1 million
- Victoria — no duty up to $600,000, with a reduced rate of $750,000 on new or established homes
- Queensland — separate concessions apply to established homes and to new builds
The variation is mostly a first-home-buyer story. Investor duty follows a similar structure everywhere, though the rates and brackets differ.
What is the first home buyers grant eligibility?
The first home owner grant is a one-off payment from your state government for buyers of new homes. Established homes do not qualify in any state. Amounts range from $10,000 in New South Wales and Victoria to $30,000 in Queensland.
To qualify, you must be 18 or over and an Australian citizen or permanent resident. Neither you nor your spouse can have owned residential property in Australia. Queensland requires the home value to be under $750,000 and applies no income test.
How does the first home buyers’ grant work with duty relief?
The grant and stamp duty relief are separate benefits with separate applications. Meeting the criteria for one does not qualify you for the other.
The grant is cash. It is paid at or shortly after settlement, usually through your lender. Duty relief reduces what you owe at settlement, so the money never passes through your account.
The eligible property differs as well. Grants apply to new homes only. Duty exemptions in New South Wales and Victoria also cover established homes. A first home buyer purchasing an existing house can pay no stamp duty and still receive nothing from the grant.
Federal support sits on top of both. The Home Guarantee Scheme lets eligible buyers skip the lender’s mortgage insurance with a smaller deposit, and using it does not affect your grant.
How to get the first home buyers grant approval
Apply through your lender at settlement or directly to your state revenue office. First home buyer grants are not available for investment purchases.
Other costs to budget for
Beyond duty, allow for:
- Conveyancing and legal fees, commonly $1,500 to $3,000
- Building and pest inspections, around $400 to $800 per property
- Lender’s mortgage insurance, which applies when your deposit sits below 20 per cent
Buyer type changes the picture here as well. Investors face tighter lending criteria and pay land tax annually above state thresholds, which owner-occupiers usually avoid on a main residence.
Auctions raise the stakes on inspection spend. You pay for reports before you know if you have won, so auction strategy shapes how much you spend on properties you never buy. Inspecting properties and property due diligence reduces the risk of paying to fix a fault you did not know about.
Cost summary by buyer type
| Cost | First home buyer | Investor |
| Stamp duty | Often nil or reduced | Full rate |
| First home owner grant | Up to $30,000 on new homes | Not available |
| Legal and conveyancing | $1,500 to $3,000 | $1,500 to $3,000 |
| Inspections | $400 to $800 | $400 to $800 |
| Lenders mortgage insurance | Applies under a 20 per cent deposit | Applies under a 20 per cent deposit |
| Land tax | Usually exempt as a main residence | Payable above state thresholds |
Investors should model land tax and holding costs alongside the purchase figures. Investment property buyers carry these every year, not once at settlement.
How a buyer’s agent helps manage purchase costs
A buyer’s agent represents the purchaser rather than the seller. The savings show up in two places: the price you agree to and the properties you rule out before spending money on reports.
Cohen Handler has buyer agents on the ground in every major Australian city, with an investment specialist working alongside them. Local teams see stock early, including off-market listings that never reach the portals. Expert property negotiation then works on the purchase price, which is the largest single variable in your total cost.
Book a buyer’s agent consultation with Cohen Handler
Stamp duty, grants and the smaller costs around them all shift depending on where you buy and what type of buyer you are. Working the numbers out before you start inspecting tells you what deposit you actually need.
Cohen Handler’s buyer agents work across every major Australian city, with an investment specialist for portfolio buyers. Contact us to talk through your next purchase.
FAQs
When do you have to pay stamp duty?
Timing varies by state. In Victoria, duty is generally paid at settlement, within 30 days of the contract becoming unconditional. Your conveyancer handles the payment.
Am I eligible for the first home buyer’s grant payments?
Only if you are buying or building a new home you will live in. Established homes and investment purchases are excluded in every state.
Can you add stamp duty to your mortgage?
Not directly. Lenders treat duty as an upfront cost, so it comes out of your deposit funds rather than the loan.