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23 April 2026
Transfer Duty Exemptions in NSW
- Pelagio Palma Jr., BA, LLB, LLM, MBA
- Estimated reading time: 8 mins
When it comes to having a property in New South Wales, there are further costs to consider. Indeed, one of the significant expenses is transfer duty. The good news is there are transfer duty exemptions in NSW. These have been put in place to make property ownership certainly more accessible and affordable for specific groups of buyers.
Acquiring a property is a significant financial commitment and constitutes further payment of transfer duty. Formerly known as stamp duty, transfer duty is a state tax that needs to be particularly considered when purchasing a property
Due to exemptions and concessions available, some of the financial burden of buying a property can be further reduced as well as eliminated. These opportunities can also make a significant difference to the overall cost of purchasing a property. Hence, they also should be carefully considered when budgeting for a new home. Additionally, such opportunities can make property ownership a significantly more viable option for those who may have found it unattainable.
What is Transfer Duty?
Transfer duty is a tax governed by the Duties Act 1997. At this time, this tax applies to the purchase of property, land and specific business assets. Moreover, the amount of transfer duty payable further depends on the value of the property and its intended or specific use. Typically, the dutiable value is still generally based on the property’s market value on the open market.
Meanwhile, the payment for transfer duty should be paid subsequently within 3 months once the contract for sale or transfer is signed accordingly. However, in the case of off-the-plan purchases intended for residential use, the payment of transfer duty may be eventually deferred for a period of up to 12 months.
When is it Applicable?
To begin with, in NSW, transfer duty must be paid when a person buys:
- Residential homes,
- Holiday homes,
- Investment properties,
- Vacant or farming land,
- Commercial or industrial properties, and
- Businesses that involve land.
Additionally, transfer duty is further applicable when acquiring land or an interest in land without any monetary transaction, such as through:
- Declaration of trust,
- Gift, or
- Change in ownership.
Most importantly, to ensure compliance, seeking legal advice is highly recommended. Still, with the help of a reliable solicitor or conveyance, they will further handle the application for transfer duty assessment and similarly facilitate the payment of the duty as part of the property settlement process. For this purpose, this will further streamline the transaction for you as a buyer, ensuring a hassle-free and seamless experience at any rate.
Payment Channels
After the assessment has been lodged, eventually, a notification will be sent detailing the total tax amount, together with any applicable interest, and finally the deadline for payment. Also, the NSW Government offers multiple payment options in the following scenarios:
- Firstly, if the settlement does not take place before the duty payment deadline.
- Likewise, if you choose to handle the duty payment yourself.
- Finally, if payment is made without the involvement of a solicitor or conveyancer.
Payments can also be conveniently made through BPAY, electronic funds transfer (EFT), or overseas electronic funds transfer.
Transfer Duty Exemptions in NSW
As a matter of fact, there are several scenarios in which you may be eligible for any of these transfer duty exemptions in NSW. Indeed, these exemptions can significantly reduce the overall cost of purchasing property and include the following:
First Home Buyers
To begin with, one of the well-known transfer duty exemptions in NSW is available to first home buyers. Buyers purchasing their first home may be eligible for transfer duty exemption in NSW if the property’s value is below a certain threshold, though this may change over time. Moreover, first home buyers may also benefit from additional concessions, such as the First Home Owner Grant (FHOG) and the First Home Loan Deposit Scheme.
To further qualify for the eligibility, the buyer must be either an Australian citizen or permanent resident aged over 18. Moreover, the buyer should also never have owned or co-owned any property and has never received a first home buyer exemption or concession before.
Transfer is Between a Married or De Facto Couple
Then, in case the transfer of the residential land is between a married or de facto couple, no transfer duty will be imposed if the property being transferred is either:
- Primary or principal place of residence, or
- A vacant land intended to be further used as the family home’s location.
This exemption is certainly applicable when the transfer results in the couple holding the property as either tenant in common in equal shares or as joint tenants. If the application for the exemption is made by de facto couples, to be eligible, they should be living at least two years before filing the application. For that reason, this further encourages smooth property transfers within married or de facto couples.
Relationship Breakdown
As per Section 68 of the Duties Act, when a marriage, de facto relationship, or domestic relationship ends, the transfer of matrimonial or relationship property is indeed exempt from transfer duty. In addition, this provision further helps ease the financial burden during a challenging period. A domestic relationship refers to two adults, who are not married, however, living together to generally provide domestic care and support.
To be eligible, the property should be particularly transferred to:
- Firstly, partners in the relationship, or either of them,
- To the child or children of either partner, or
- Lastly, to the trustee of the child or children of either party.
In essence, in times like these, seeking legal guidance on this matter is recommended. At VC Lawyers, we further provide reliable assistance in drafting your Financial Agreement or Consent Orders for such breakdown of marriage or de facto or domestic relationship to give effect to such transfer.
Foreign Transferees
Foreign transferees refer to individuals, corporations, and trustees of a trust who acquired a residential-related property in NSW. Though they may be exempted from transfer duty, they are still bound to further pay the surcharge purchaser duty. This duty is currently calculated at 8% of the dutiable value of the property.
Family Home Intended for Other Purposes
If the family home is used for other purposes, the exemption will be specifically applied to the residential part of the home only. Thus, the residential land should be solely used for residential purposes. This also allows one room in the residential home to be used for non-residential purposes if the main business is done elsewhere. However, if more than one room is used primarily for business, the exemption will not apply. Instead, the taxes on the transfer may be reduced.
Beneficiary of a Deceased Estate
Another instance where transfer duty is further exempted is being a beneficiary of a deceased estate. However, if the property is received under the terms of the Will, a concessional rate of $50 will be imposed. Moreover, the beneficiaries of the Will may further decide to vary their entitlement. For instance, one beneficiary might opt to give or sell a portion of the property they received to another beneficiary. In such cases, any part of the property that further deviates from the terms of the will is equally subjected to the standard transfer duty rate.
Reliable Assistance for Transfer Duty Exemptions in NSW
Indeed, acquiring a property is a significantly momentous milestone in one’s life. It not only offers a sense of stability and security but also serves as a valuable investment for the future.
However, navigating this landscape can be certainly complex and involves further legal and financial implications that may overwhelm property owners. If you find yourself in need of reliable assistance in understanding the various transfer duty exemptions in NSW, VC Lawyers is here to help.
Our team of experienced solicitors is dedicated to offering the necessary advice and support to ensure a seamless and successful property acquisition. Do not let the complexities of property ownership discourage you from owning your dream property. VC Lawyers is here to navigate this journey with you.
NB: This blog post is neither a legal advice nor intended to be such, and is only for general information. The same should not also be taken as a financial or commercial advice. The reader must personally consult their professional adviser/s on the contents of this blog post. VC Lawyers is not liable for any loss or damage, direct or consequential, as a result of the reader’s or a third person’s misconstruction of the wordings or use/misuse of the contents of this blog post.
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