Did you know, as a first home buyer, you may be eligible to save up to $24,525 with the QLD Government Stamp Duty Rebate?
We understand there’s a lot to consider when purchasing your first home. In this article, we’ll focus specifically on Stamp Duty—what it is, how it affects you, and ways to minimise it or avoid paying it.
Let’s get started.
What is Stamp Duty in Queensland?
Stamp duty essentially is the tax imposed by the QLD government on insurance, sometimes on car purchases and always home purchases. The amount charged is the higher of the market value or the property value (including general sales tax). This means the higher the property value is, the higher the stamp duty in Queensland will be.
Stamp duty can be a substantial additional cost towards buying a property, so the Queensland government has decided to help first home buyers out by giving them a rebate on all or part of the cost of the stamp duty.
What you need to know:
- ✅ Stamp duty is paid by the buyer of a property
- ✅ There are discounts and waivers of stamp duty for certain home buyers
- ⛔️ It is paid on new homes, established homes or vacant land
- ⛔️ The price you pay varies depending on the value of the property
Who is Required to Pay it?
This is a really important and common question asked by many buyers and investors.
Every buyer or investor purchasing property is required to pay stamp duty in Queensland. However, an exception to that is First home buyers in Queensland who may be eligible to the First Home Buyers Stamp Duty Rebate. If you’re not in Queensland, understand that the rebate varies between states, so always check your state government’s rules.
If you don’t qualify as a first home buyer or are outside of the terms of this rebate then you’ll need to include this in your budget to avoid any unpleasant surprise when you make a purchase.
Who needs to pay stamp duty?
- ⛔ Those who have already purchased their first property (buying their second or third property).
- ⛔ The buyer pays it – not the seller.
- ⛔ It’s usually paid between 30 to 60 days of signing the contract (depending on the state you are in and when settlement is to occur), but in most cases is paid on the day of settlement.
- ⛔ First home buyers purchasing properties over $800,000 or vacant land over $500,000 are required to pay stamp duty.
As of June 9, 2024, first home buyers in Queensland are exempt from paying stamp duty on homes valued up to $700,000. For properties valued between $700,000 and $800,000, a partial concession applies, reducing the amount of stamp duty payable.
Disclaimer: Please speak to our team of experts at Hunter Galloway or a finance expert to calculate the exact amount of stamp duty for your personal situation. The above calculator is an example and each situation varies and needs to be looked at on a case by case basis.
Is Stamp Duty part of my deposit?
Stamp duty is paid by the buyer when you are buying a property and is paid on top of the 8-10% deposit you put towards your home purchase.
Let’s look at a quick example, of a first home buyer purchasing a home in Queensland for $750,000.
Purchase Price: $750,000 with a 10% deposit
✅ Bank Deposit 10% = $75,000
✅ Bank Loan: $675,000
✅ Costs & Fees: $21,559
- Purchase Stamp Duty: $17,800
- Transfer Fees: $1,564
- Registration Fees: $195
- Legal/Conveyancer Costs: $1,500
- Building & Pest: $500
In this scenario, the total funds required would be $75,000 (deposit) + $21,559 (costs & fees) = $96,559. This equates to approximately a 12.8% deposit when factoring in all additional costs.
Rates of Stamp Duty in Queensland
As of June 2024, the Queensland government increased the threshold for the first home concession on transfer duty from $500,000 to $700,000, with the concession phasing out up to $800,000. For vacant land, the threshold increased from $250,000 to $350,000, phasing out up to $500,000.
For updated information, check out the Queensland Government website
How can I get stamp duty rebates?
If you’re eligible for a stamp duty rebate it can really help you kickstart your new homeowner journey. It’s kind of like the cherry on top, it makes it that little bit easier because it’s one less expense you’ll need to think about.
So here’s a total breakdown of who is eligible for stamp duty rebate:
1. You’re an Australian Resident / Over 18
However, if you’re not an Australian resident, there’s still a way!
Read on for more…
- ✅ You are over 18 at the date of purchase, so if you’re an upcoming 17-year-old property mogul, hold tight until that date.
- ✅ You’re a permanent resident in Australia or an Australian citizen. However not to worry if you aren’t, you are still eligible for the concession, yet you’ll need to pay an additional levy called the Additional Foreign Acquirer Duty (AFAD) which is levied at 8% of the purchase price.
2. This is your first purchase
So now is the time to weigh up your priorities between making your first purchase on that villa in the Tuscan Countryside or the apartment in Burpengary you were looking at. Because to be eligible for the stamp duty rebate, it needs to be on your first purchase, in the world!
- ✅ To be eligible for the rebate this will need to be your first purchase, ever, in the world.
- ✅ You have never part-owned a property in the past.
- ✅ You’ve never claimed the First Home Owner Grant.
- ✅ For those buying as a couple, only the first home buyer can claim their portion of the rebate. If the property is owned 50/50 you will only be eligible to 50% of the rebate.
3. You’ll live in the property for at least 12 months
It’s time to get comfortable! In order to be eligible for the stamp duty rebate, you’ll need to spend at least 12 months in the property. Because if you don’t you’ll need to be payback either part or all of your rebate (ahhh that’s a no from me).
- ✅ You’ll need to live in the property for at least 12 months consecutively.
- ✅ And those 12 months needs to commence within 12 months of the purchase date (so if you’re building still, you better get moving).
When is Stamp Duty Required to be Paid?
It is very important to be fully aware of when you should pay the stamp duty in Queensland to avoid any hiccups. So here it is…
Buyers and investors are required to make the payment within 30 days of the property settlement.
The process:
- ✅ The stamp duty rebate will be calculated prior to settlement by your solicitor or conveyancer and they will figure out your rates etc.
- ✅ From here, your rebate will be taken into account.
- ✅ Your solicitor is required to notify you with the exact amount you need to pay.
- ✅ They will let you know prior to settlement what you owe so that you can get the funds ready two business days prior to settlement.
Read More: Home Loan Process [Step-by-step guide]
Why does the Queensland Government Charge Stamp Duty?
That’s a very good question.
If you are paying a substantial amount out of your pocket, you have every right to ask this question.
Stamp duty is collected by the territory and state government and they use this amount for economic development and invest it back into the economy.
In other words, the amount is included in the state budget and it is used for the development of economic activities, such as emergency services, justice, police, roads, transport, and health.
Stamp duty can also be added to some insurance payments and gifts, but generally the more expensive, the more stamp duty.
Read More: First Home Owners Grant QLD 2022 [Are you Eligible?]
How Much Does it Cost?
It varies from one state to another. Territory and state governments determine the amount required to be paid. It isn’t always easy to calculate the amount you owe in stamp duty, because every state charges a different rate. So always be sure that you’re looking up your state specifically, so for the sake of this article, we’ve focused on Queensland.
This can be quite confusing for first time home buyers. But the good news is, you can calculate the amount using an online calculator.
The key facts:
- ✅ The majority of the territory and state governments offer online calculators to help you figure out the amount you owe.
- ✅ You can speak to our team personally about how the rate is calculated.
- ⛔ If you are buying an established home valued under $700,000 or if you’re buying a block of vacant land under $350,000 you’ll need to pay stamp duty.
Read More: 16 Hidden Costs of Buying a Home in Brisbane
Exemptions from Stamp Duty
In Queensland, certain transactions are exempt from paying stamp duty (also known as transfer duty). These exemptions include:
Transfer to a Spouse: Transferring an interest in your home to your spouse as a gift can be exempt from duty, provided specific conditions are met.
Death of a Property Owner: When a property owner passes away, transferring their interest in the property to a beneficiary may be exempt from duty.
Charitable Institutions: Transfers to certain charitable institutions may also qualify for exemptions.
It’s important to note that these exemptions have specific eligibility criteria. For instance, when transferring property to a spouse, the transfer must be by way of gift, and after the transfer, both spouses must own the entire home as joint tenants or tenants in common in equal shares. Additionally, the home must be your principal residence.
Bonus: Other government fees when buying a home in Brisbane.
Stamp Duty is not the only government fee you will need to pay when buying a home in Queensland. There are other government costs, including:
- Registration on mortgage: Typically $187 in Queensland
- Registration of discharge of mortgage: $187 in Queensland
- Council and water rates. This is an expense many home buyers underestimate. Depending on the neighbourhood, your council and water rates can be between $1,000 to £2,000.
Bonus: NSW Stamp Duty changes
As of July 1, 2023, the New South Wales (NSW) government implemented significant changes to stamp duty for first home buyers:
Increased Exemption Threshold: The threshold for stamp duty exemptions for first home buyers was raised from $650,000 to $800,000.
Concessional Rates: Properties valued between $800,000 and $1 million are now eligible for concessional stamp duty rates.
These changes aim to make homeownership more accessible for first-time buyers in NSW. However, eligibility criteria apply, and it’s important to consult with a legal or financial professional to understand how these changes may affect your situation.
Help I'm not quite sure what applies to my situation?
If you are looking to build a home in Queensland, or buy a new home using the first home owners grant our team at Hunter Galloway can help.
Our team here at Hunter Galloway helps first home buyers with navigating the home buying process.
What we do is make it simple to get through the home loan process, and with our team of experts, we will help walk you through the process to complete your first home buyers grant application. If you are building your first home we can help walk you through the construction loan process.
Our service does not cost you anything as we are paid by the lender when your home loan settles.
To chat about your deposit, lending and first home ownership options book in a time to sit down with us, or feel free to call on 1300 088 065.
More Resources for first home buyers
- First Home Buyers Guide from start to finish
- How to Buy a House 🏘 (Step-By-Step Case Study)
- Using your Superannuation to build your deposit: The Complete Guide to the First Home Super Saver Scheme
- How to save for a house deposit (fast)
- Queensland Transfer Duty Estimator
- Build a House in Brisbane 🏗 The Definitive Guide
The information on this page is general in nature and should not be considered as advice. Before you act on this information you must seek independent legal and financial advice.
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