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Stamp Duty ACT

If you’re looking to buy a property in the Australian Capital Territory, you’ve probably heard people talk about stamp duty, also known as transfer duty. But what is it, and does it apply to you?

Simply put, stamp duty is a tax we pay when buying a house. The ACT government charge a percentage of the price of the property you’re buying. On average, people in the ACT pay tens of thousands of dollars in stamp duty. That’s on top of the mortgage, deposit and other expenses that come when buying a property.

How much does stamp duty cost?

The exact price of stamp duty is determined by each state or territory government. Currently in the ACT, there are seven different price brackets that determine your stamp duty.

See the table below to get an idea of how much you will pay.

Property value Stamp duty payable
Up to $200,000 $20 or $1.30 per $100 or part of $100, whichever is greater
$200,001 to $300,000 $2,600 plus $2.30 per $100 or part of $100 by which the value exceeds $200,000
$300,001 to $500,000 $12,100 plus $4.56 per $100 or part of $100 by which the value exceeds $500,000
$500,001 to $750,000 $17,325 plus $4.50 for every $100 or part of $100 over $540,000
$750,001 to $1,000,000 $23,500 plus $6.10 per $100 or part thereof by which the value exceeds $750,000
$1,000,001 to $1,455,000 $38,750 plus $6.60 per $100 or part thereof by which the value exceeds $1,000,000
More than $1,455,000 A flat rate of $4.73 per $100 applied to the total transaction value
Building inspector checks roof for damage during summer storms

When do I have to pay stamp duty?

In the ACT, you have to pay stamp duty after settlement and within 14 days after receiving a Notice of Assessment. This means that you need to make sure you budget for stamp duty on top of your deposit, mortgage, building inspection, moving costs and other expenses.

Unfortunately, stamp duty needs to be paid up front and can’t be paid periodically as a part of your mortgage.

Are you entitled to any stamp duty concessions?

Now for some good news! Before you have to hand over potentially tens of thousands of dollars in tax, you might qualify for a stamp duty exemption. If you’re a first home buyer you are entitled a full exemption to stamp duty, as long as the total gross income of your household is less than $160,000. However, families with dependent children are can still eligible if their income exceeds $160,000. Full details and income rates are available on the ACT Revenue Office website.

Concessions on stamp duty are also available for deceased estates, matrimonial transfers, and other particular life circumstances. We recommend always checking to see if you qualify for a stamp duty concession.

Calculate your stamp duty now with our free Stamp Duty Calculator

The issues with stamp duty

For many years people have raised their concerns with stamp duty. It may earn the government a considerable amount of money, but it’s had a real impact on everyday Australians. Critics of stamp duty have pointed out that it’s outdated, it comes at a financially difficult time and it also ends up changing our behaviour for the worse.

An out-dated tax

The original tax for stamp duty comes from an old system of government. Land transfers were less common and property wasn’t logged to the level of detail that it is today. Plus, the actual process to officiate a sale and stamp (yes, a real stamp) the documents took more government time. Stamp duty was therefore an imperfect way to make sure the government was getting taxes from property owners, but things have changed a lot since then. Not only is the process much easier for governments, but there are now accurate and up-to-date records of every piece of land in the ACT. The way we buy and sell property has changed, and so the question is – shouldn’t the taxes that come with it change too?

The cost of stamp duty

Easily one of the most significant purchases the average Australian makes is buying property. It’s an exciting dream that many of us pursue. But at the same time, it’s a high financial bar to get over. Property prices in the ACT have soared upwards over the past few decades and are now vastly higher than the average income. Which means that stamp duty is not only a high tax, but it comes when the difference between the average wage and the average price of property is wider than ever.

Behaviour changes

Perhaps most importantly, the cost of stamp duty can also lead to some behaviour changes. The added cost is a big barrier to anyone trying to enter the real estate market. But not only this, it’s a big deterrent on anyone who’s looking to move to a new house. A growing family may choose to stay and try to renovate or expand their current house just to avoid paying stamp duty again. So too, retirees often stay in houses that aren’t ideal for their needs simply because downsizing will cost them a lot in tax.

The future of stamp duty

Many will be glad to hear that reform is on the horizon. The Australian Capital Territory is currently leading the way to phase out stamp duty. In 2012, the ACT government released a 20-year plan to reform the territory’s property tax, an intention they said aimed to “abolish a number of inefficient and unfair taxes”. Instead, they are replacing it with “barrier free conveyancing”.

At the end of 2020, the New South Wales treasurer, Dominic Perrottet, proposed his own plan for tax reform, with the intention “to help the people of NSW achieve the Australian dream of home ownership.” His solution replaces the upfront cost of stamp duty with a much smaller annual property tax. While the change hasn’t been officially approved yet, many are hopeful that the ideas for reform will lead to change. Ultimately, the future of stamp duty in the ACT is in the hands of the territory government.

Stamp duty calculator

If you’re buying a house and want to get a quick idea of stamp duty fees, use our free and easy stamp duty calculator, also known as a transfer duty calculator.

While keeping on top of your outgoing costs, why not also calculate your conveyancing fees. Our Conveyancing Costs Calculator will provide an estimate in just a few minutes. Calculate your costs now!

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