How to Avoid Stamp Duty in NSW: A Comprehensive Guide

Buying a new home is as exciting as it is challenging, especially with the complex and varying rules of stamp duty (also known as transfer duty in NSW). However, understanding the way stamp duty works with the NSW government can arm home buyers with the financial confidence to plan for smart (and legal) moves.

Stamp duty needs to be a budget consideration for all NSW property purchases, including first homes, land and investment properties. The tax is calculated as a percentage of either the property’s purchase price or the market value (whichever is highest). These rates increase according to the property value, so the more expensive your property, the more stamp duty you will pay.

However, some exemptions and concessions with the NSW Government can reduce the stamp duty you are legally required to pay. These reductions are available to certain groups, such as first home buyers and pensioners, and have varying eligibility criteria. With our NSW mortgage expertise, we have broken down each government stamp duty incentive, so you can find stability in your home loan journey.

What is Stamp Duty?

Stamp duty in NSW (or transfer duty) is a one-off government tax on all property purchases, which then helps fund public services such as transport or education. It is calculated on a sliding scale as a percentage of the property purchase price or market value (whichever is higher). The higher the property price, the higher the tax percentage is.

Here’s what that could look like:

Oliver buys a property for $500,000 on 30th July 2025. The NSW transfer duty rate is $11,152 plus $4.50 for every $100 over $372,000. His total stamp duty (without applying for any exemptions) will be $16,912.

On the same day, Hannah buys a home with a property value of $990,000. Her total stamp duty in NSW (without applying for any concessions) will be $38,962.

So, with a sliding scale that gets more expensive, who is eligible for a reduction and can anyone avoid it?

Can You Avoid Stamp Duty in NSW?

For certain groups of people, such as first-home buyers, who meet an eligibility requirement, you can avoid or reduce your stamp duty costs. However, in most cases, stamp duty is an unavoidable cost as it is a necessary tax to fund the NSW Government’s services. Stamp duty concessions or exemptions are applied for specific reasons, primarily to make homebuying more affordable and accessible.

How to avoid stamp duty in NSW

The only way to legally reduce or avoid stamp duty in NSW is through government exemptions, applicable to certain groups meeting an eligibility criterion. As of 2025, these avenues include:

• First Home Buyers Assistance Scheme: $0 duty under $800,000 with discounts up to $1 million and live-in requirements.
• Family Transfers: Varying exemptions for spouses or after a separation.
• Inheritance: $50 nominal duty if a property is passed via a will or estate.

First Home Buyer Assistance Scheme (FHBAS)

What is it?

The First Home Buyers Assistance Scheme makes home buying in NSW more affordable and accessible. Certain first home buyers who apply to the scheme can get either a full exemption or reduced transfer duty rates, depending on the property value:

• Full exemption for homes valued up to $800,000.
• Rate reduction for homes valued between $800,000 and $1 million.

How Much Can You Save?

For a full exemption on new or existing homes under $800,000, you can save on the full cost of the stamp duty tax. The reduced rates for eligible first home buyers are applied on a sliding scale, depending on the property value.

(Sources: Full Stamp Duty Rates & FHBAS Rates)

Who’s Eligible?

In general, eligible first home buyers for the FHBAS new or existing homes criterion must:

• be 18 years or over.
• be an Australian citizen or a permanent resident of Australia.
• be an individual, not a company or trust (this can be waived for some circumstances, such as a legal guardian trustee).
• not have owned or co-owned a property in Australia before.
• be purchasing property for under $1,000,000.
• (for an existing home) move in within 12 months and live there continuously for at least 12 months.

Buying with a spouse or partner:

• both have never owned or co-owned a residential property in Australia.
• both have never received an FHBAS exemption or concession.
• at least one applicant must be an Australian citizen or permanent resident.

Buying with a friend or relative:

• the eligible applicant must be buying at least half of the property.
• the ineligible applicant must pay stamp duty on the value of their share of the property.

If you are still unsure if you are qualified to avoid or reduce stamp duty costs as a first home buyer, check out the FHBAS eligibility criteria.

Real Example

Australian brothers Josh and Liam decide to buy a house together in Parramatta for $990,000, splitting the purchase 50/50 and moving in immediately. Josh has never owned or co-owned a property before, so he is eligible for FHBAS. Liam has previously co-owned a unit, so he is ineligible.

• Josh’s share of the property value is $495,000, so he is exempt from paying any stamp duty.
• Liam’s share is also $495,000, and he has to pay $16,687 in stamp duty on the value of his share.

FHBAS Vacant Land & House-and-Land Savings

What is it?

The First Home Buyers Assistance Scheme (FHBAS) also makes new build dreams more affordable and accessible in NSW. There is another eligibility criterion for when buying vacant land, depending on the value:

• Full exemption for land valued up to $350,000.
• Rate reduction for land valued between $350,000 and $450,000.

How Much Can You Save?

For a full exemption on vacant land valued up to $350,000, you can save on the full cost of the stamp duty tax. The reduced rates for eligible vacant land valued between $350,000 and $450,000 are calculated on a sliding scale.

(Sources: Full Stamp Duty Rates & FHBAS Rates)

Who’s Eligible?

In general, eligible first home buyers for the FHBAS vacant land criterion must:

• be 18 years or over.
• be an Australian citizen or a permanent resident of Australia.
• be an individual, not a company or trust.
• not have owned or co-owned a property in Australia before.
• be purchasing property for under $1,000,000.
• intend to build a home and occupy it for a continuous period of at least 6 months, with the stay commencing within 12 months of the building’s completion.

Buying land with a spouse or partner:

• both have never owned or co-owned a residential property in Australia.
• both have never received an FHBAS exemption or concession.
• at least one applicant must be an Australian citizen or permanent resident.

Buying land with a friend or relative:

• the eligible applicant must be buying at least half of the land.
• the ineligible applicant must pay stamp duty on their share of the land.

Real Example

Permanent resident couple Lucy and Olivia decide to buy vacant land in Bathurst for $370,000. Both have never owned or co-owned any property or land in Australia. They already have an architect and concept design for their home and intend to start building immediately to move into the property on completion. They are eligible for the reduced stamp duty rate of $2,776.40, saving them $8,305.60.

Exemptions for Australian Defence Force (ADF) Members

What is it?

Members of the Australian Defence Force (ADF) receive a crucial benefit when assessing their eligibility for FHBAS in New South Wales. The scheme recognises that deployment can prevent an ADF member from meeting the standard residency requirement (living in the home continuously for a 6-month period). Therefore, ADF members can have this residency requirement waived and still be eligible for FHBAS.

They must still be a first home buyer to get either a full exemption or concession, depending on the value:

• Full exemption for homes valued up to $800,000 and vacant land valued up to $350,000.
• Rate reduction for homes valued between $800,000 and $1 million and vacant land valued between $350,000 and $450,000.

How Much Can You Save?

Eligible first home buyers who are ADF members can receive a full exemption for new or existing homes below $800,000 and vacant land below $350,000.

For a new or existing home between $800,000 and $1,000,000, they can be eligible for the following stamp duty rate reduction:

For vacant land valued between $350,000 and $450,000, they can be eligible for the following stamp duty rate reduction:

(Sources: Full Stamp Duty Rates & FHBAS Rates)

Who’s Eligible?

In addition to the First Home Buyers Assistance Scheme eligibility criteria, ADF members must also:

• be on the NSW electoral roll at the time of purchase.
• be unable to occupy the property due to their current deployment.
• (for joint applications) only one of the applicants needs to be an ADF member, but both applicants must be registered for the NSW electoral roll at the time of purchase.

Real Example

Katie and Harry are an Australian couple in their 30s buying their first home together in NSW for $900,000. They are both on the NSW electoral roll and intend to move into the property. However, Katie is an ADF member and is being posted to Perth, so she will not be able to live there continuously. Under the ADF member waiver, Katie and Harry are still eligible for the FHBAS concession. They will pay a reduced stamp duty rate of $19,706, saving $15,206.

Transfers Between Family

What is it?

There are certain situations in which a property is transferred between family members or couples, and some may qualify for a transfer duty exemption or concession.

Who’s Eligible and How Much Can You Save?

Married or De Facto Transfers

Married or De Facto couples can transfer a residential property to each other and may be eligible for a full transfer duty exemption if:

• it is either the family home or vacant land with the intention to build the family home.
• the property is transferred to be held by both partners as joint tenants or tenants in common in equal shares.
• unmarried de facto partners must have been together for at least 2 years.

Transfer after a relationship breakdown

After a breakup, partners may be eligible for a full transfer duty exemption if the property is transferred to:

• either partner.
• a child of either partner.
• a trustee of the child.

Real Example

Australian couple, Charlie and Sam have been in a de facto relationship for 5 years. Charlie has owned the home they live in for 10 years and wants to transfer half the ownership to Sam so they own it equally. The couple is exempt from stamp duty and can transfer the home ownership without paying this tax.

Inheritance

What is it?

A residential property can transfer ownership as part of the terms in a will and will qualify for different stamp duty rules in New South Wales.

How Much Can You Save?

A nominal transfer duty rate of $50.

This means that if a home valued at $900,000 is transferred through inheritance in a will, the new owner will only pay $50 in stamp duty rather than the full $34,912 they would pay if they bought it new.

Who’s Eligible?

In general, any beneficiary named in the will is eligible for this exemption on property transferred directly to them. However, there are certain restrictions in place in NSW:

• in the event of no will, the rule of intestacy will apply (i.e. a spouse will inherit the property unless the person has children).
• beneficiaries who want to vary the ownership of the property from what is stated in the will may incur the normal transfer duty on the portion they are acquiring.

Real Example

Australian siblings Bo and Kirra inherit their family home in Sydney, valued at $850,000, as equal tenants in common under the terms of their parents’ will.

1. Initial Inheritance: The transfer of the property from the estate to Bo and Kirra jointly incurs a nominal duty of just $50.
2. Subsequent Transfer: Bo then decides to sell his half-share to Kirra. As this is a sale and not part of the original inheritance terms, Kirra must pay full transfer duty on the value of the share she is buying. For her purchase of Bo’s $425,000 half, her stamp duty payment will be $13,537.

Why Stamp Duty Adds Up So Fast

NSW stamp duty can be a significant cost that increases quickly with the property value. As seen in Oliver’s case, the stamp duty on a $500,000 property is $16,912. This jumps to nearly $39,000 for Hannah’s $990,000 home. When you take into consideration the deposit payable is between 5% and 20% of the house value too, the upfront cost to buy your dream home can be sizable.

However, knowing the costs upfront for your budget gives you a huge advantage in planning and saving. Use our stamp duty calculator to see how much you could be paying for a house in your budget.

Properties Subject to Stamp Duty

In New South Wales (NSW), stamp duty applies to the following types of property transactions:

• Residential homes
• Investment properties
• Vacant lots
• Farming land
• Businesses that include land
• Commercial properties

Application Process for First Home Buyer Assistance Scheme

Applying for these schemes is straightforward if you meet the qualifications. Follow these steps:

1. Download and complete the First Home Buyer Assistance Application Form.
2. Lodge your application and identity documents with your lawyer or conveyancer.

Find Out if You’re Eligible and How Much You Could Save

Don’t let the unknown put you off from buying your home. Our team of expert mortgage brokers can guide you through your eligibility and estimated stamp duty costs, completely free of charge, with a 15-minute strategy call. We have extended opening hours so the phone call can always fit into your schedule.

We’re firm believers that every Australian should have access to the financial knowledge they need to become homeowners.

“My inspiration comes from seeing the positive impact that property ownership can have on a person’s financial well-being and knowing that my expertise can help them navigate this journey with confidence.”

-Andrew Hadjidemetri, Director of AFMS Group (interview).

You can access expert home loan advice from our passionate team with zero broker fees. Give us a call today and start thinking ahead for your stamp duty costs.

Australian Financial and Mortgage Solutions (AFMS) and Stamp Duty

AFMS Group gives personalised deliberation to evaluate each client’s financial standing and housing plans. We maintain current updates of stamp duty exemption policies for both the federal and state levels in Australia, so you don’t have that hassle. Our experts work with first-time buyers to better understand their unique situations and advise on solutions to avoid or reduce stamp duty in NSW.

We also provide all-inclusive support with documentation requirements for stamp duty exemption schemes. Our team guarantees that all important paperwork is completed correctly and submitted in a timely manner to facilitate a smooth process.

“My approach to customer service is built on one simple yet powerful principle: responsiveness. I guarantee that all client inquiries will be acknowledged within 4 hours. This commitment to responsiveness is something that sets me apart in an industry where clients often feel left in the dark.”

-Andrew Hadjidemetri, Director of AFMS Group

Contact AFMS Group now to schedule a consultation with one of our experts.

Download Your Stamp Duty Cheatsheet

The first step to your next front door is planning. Our stamp duty cheatsheet helps you map out the thresholds, reductions and eligibility criteria in one easy document. Make your property plans possible by downloading today:

Avoiding Stamp Duty: Your Most Asked Questions

Can you legally avoid paying stamp duty in NSW?

Yes, providing you meet the requirements. If you are an Australian citizen or permanent resident and a first home buyer in NSW, you don’t have to pay stamp duty on an existing home valued below $800,000. You have to move in within 12 months and live there for 12 consecutive months.

Can I avoid stamp duty if I buy land and build later?

Yes, if you are an eligible first home buyer and you buy land valued below $350,000, you are exempt from stamp duty. You must intend to build your home, but there is no deadline for the completion date. However, once the build is complete, you must move in within 12 months and live there for 6 consecutive months.

Can you avoid stamp duty when transferring property to family?

You don’t pay stamp duty if you transfer your principal place of residence to your spouse or de facto partner, and you both equally share the property. Similarly, you are exempt from duty if a property is transferred as part of a relationship breakdown settlement.

Are investors eligible for stamp duty exemptions in NSW?

The residence eligibility requirement for stamp duty exemptions in New South Wales means you must live in your property for a continuous 6-month period (12 months for existing homes under FHBAS). Therefore, investors are ineligible for these stamp duty concessions.

Can you pay stamp duty in instalments in NSW?

In general, stamp duty must be paid in full within three months of the contract date, or at settlement, whichever is earlier. However, for off-the-plan purchases, eligible buyers may be able to defer payment for up to 12 months.

How do I apply for a stamp duty exemption in NSW?

You can apply in 5 steps:

1. Confirm Eligibility
2. Complete the “First Home Buyer Assistance Scheme Application Form.“
3. Gather Supporting Documents
4. Submit the Application to Revenue NSW
5. Await Assessment and Respond if Needed

With AFMS Group, your mortgage broker can guide you through each step to qualify your documents. The best part? You don’t pay broker fees.