Stamp duty in Tasmania

Hobart, Tasmania. Picture: Getty

While the state government has renamed it transfer duty, we more commonly know it as stamp duty. Largely an unavoidable part of buying property, stamp duty is a significant consideration for anyone buying residential real estate in Tasmania. The tax is levied by the Tasmanian Government and adds a considerable cost to purchasing a home or investment property, so it’s worth understanding how the duty works, how to calculate it and when it needs to be paid. It could also make a big difference to your property purchase if you qualify for an exemption or a concession. Once you know what your stamp duty costs will be, then you can begin budgeting with confidence.

What is stamp duty about?

Much like other income streams for the state government, stamp duty is a way Tasmania raises much-needed funds for a long list of essential public services. The fee, originally named after the rubber stamp officials used to approve paperwork in the past, accounts for approximately $60 million in revenue for the Apple Isle. Most property transactions, including residential, commercial and vacant land attract stamp duty and the one-off payment must be paid within three months of settlement day and is payable by the purchaser.

How is stamp duty calculated in TAS?

Tasmania’s stamp duty is calculated as a percentage of the property’s purchase price, so how much you will need to pay is directly dependent on the price of the home or investment you buy. In Tasmania, the State Revenue Office (SRO) is responsible for collecting stamp duty and setting the rates which remained the same since 2013. To avoid surprises during the home-buying process, it’s essential to calculate your stamp duty upfront.

Here’s a simplified breakdown of how stamp duty in Tasmania is calculated:

Example case study

Indira and Joe want to buy a house in Tasmania for $500,000, but because Indira has owned a home before, they don’t qualify for any exemptions or concessions. After consulting a stamp duty calculator they’ve worked out they’ll be required to pay the total amount of $12,935, plus $4.25 for every $100 making up the difference between $375,000 and $500,000. Because this difference is $125,000, their stamp duty bill will come to a final amount of $18,247.50.

Stamp duty exemptions and concessions in TAS

Purchasing off the plan

For buyers purchasing an apartment or townhouse off the plan, they can apply for a 50% reduction of stamp duty on transactions. At least one of the purchasers needs to be an Australian citizen, the property must be in a strata scheme or be conjoined with one or more other dwellings, and be valued at less than $750,000.

Pensioners

Pensioners in Tasmania may be eligible for a concession if they are selling their family home to downsize to a smaller property. This concession, introduced to help retirees move into more manageable properties without facing big tax bills, reduces the stamp duty payable on their next purchase. In some circumstances, the transfer of property between family members is also exempt from stamp duty in Tasmania.

First-home buyer help with stamp duty

The Tasmania Government confirmed in July 2024 that stamp duty would be abolished for properties with values under $750,000. Tasmanian first-home buyers could save up to $28,945 in stamp duty fees now, but need to live in the home for six months within 12 months of ownership. Additionally, first-time buyers in Tasmania may qualify for the First Home Owner Grant (FHOG) of $10,000 grant, as well as avoiding stamp duty.

Stamp duty for investors and foreign buyers

Investors in Tasmania are subject to the same stamp duty rates as owner-occupiers and it is an inevitable cost of doing business in real estate. That being said, while stamp duty isn’t deductible as an upfront tax deduction, it can be factored into your property’s cost base, which may help reduce your capital gains tax liability when you go to sell the property one day.

Foreign buyers will also need to pay an additional Foreign Investor Duty Surcharge (FIDS) which is currently 8% of the property’s value and is payable on top of the standard stamp duty (above).

Budgeting for stamp duty

Unless you qualify for an exemption, stamp duty is a necessary cost that comes with buying a home. And at no small sum, it’s crucial to budget for it early on in your property search so you’re not caught out when you can lest afford it.

Use an online calculator specific to Tasmania so you have an accurate estimate of how much you’ll need to pay. Once you know the amount, factor it into your deposit, this way you won’t be borrowing to pay the bills. Ands finally, speak to a professional such as a conveyancer, solicitor or mortgage broker to provide you with detailed advice tailored to your situation.