A duty is a generic tax payable on transactions involving certain types of property. Stamp duty is charged by the revenue office of each state and territory government. Your liability to pay and the required amount will depend on the rules imposed by the state or territory in which the transaction occurs.
Stamp duty may be charged either at a flat rate or ad valorem (according to the value of the transaction). In most cases the statutory obligation to pay stamp duty is imposed on the buyer. In some specific cases the duty can be the responsibility of the seller.

Transactions to which stamp duty applies are referred to as 'dutiable transactions.' Some examples of dutiable transactions include:

• purchase of insurance;
• lease or hire of certain goods including vehicles;
• lease of non-residential property;
• mortgages;
• purchase of shares in a company or trust;
• many other dealings involving trusts, partnerships or joint ventures; and
• the purchase of livestock in some states and territories.

For example as an individual or small business owner in New South Wales you are likely to pay stamp duty when you purchase a new or used car, a home or a business.

• A new or used car that costs you $33,000, can be expected to attract around $1000 in stamp duty on top of registration costs.
• Persons purchasing a new home or land can expect to pay around $18,000 worth of stamp duty on a $500,000 home.
• The purchase of an existing business worth $400,000 could be expected to attract around $13,500 in stamp duty.

It is evident from such examples that stamp duty makes up a large proportion of the financial burden incurred when you are involved in a dutiable transaction. It is wise to inform yourself of your potential stamp duty liability before arranging finance for your purchase.

Each state and territory government has its own laws concerning the rates at which stamp duty is applied for different transactions as well as regulating the kinds of exemptions or concessions that apply. Common exemptions applied by state and territory governments can include some of the following.

• If you are a first homebuyer you may be entitled to an exemption or concession on stamp duty up to certain limits except in Tasmania.
• Some state and territory governments also encourage the building of new homes to meet the demands of an increasing population by offering stamp duty concessions on any purchase of vacant land on which you plan to build a new home.
• As a pensioner you may receive a stamp duty concession on some transactions unless you are in NSW.
• The transfer of farming land between family members may also be exempt providing certain conditions are met.
• Charitable organisations are frequently exempted from most forms of stamp duty.
• The transfer of commercial property held in your own name into your self-managed superannuation fund will also attract only a nominal (very small) stamp duty liability.

There are a lot of other transactions which may incur duty which are not covered in this document

This Legal Guide on Stamp Duty provides purchasers and sellers with information about their stamp duty liability and any concessions or exemptions that might be available. A strong focus is placed on stamp duty liability associated with the purchase of real estate and land. Before making important decisions it is advisable to obtain legal advice specific to your situation. LegalEagle’s™ free directory profiles all lawyers in Australia. You can use it to Find a Lawyer near you.

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Warning: Information provided through LegalEagle™ is for general guidance. It is not legal advice. Laws and procedures referred to may change and differ between states, territories and nationally. There may also be important exceptions or qualifications. Only a lawyer providing formal legal advice can assess your particular circumstances to determine how the law will apply.