Stamp duty in Western Australia

Perth, Western Australia. Picture: Getty

Transfer duty, more commonly known as stamp duty, is simply an inevitable part of purchasing property in Western Australia. While it’s a fairly familiar term that comes up in many real estate conversations, it’s not always clear what it is, how much it costs or when it needs to be paid.

In most cases, stamp duty is unavoidable, but it need not be daunting. By understanding how it works, calculating the costs early on, and seeking advice from a broker, you can ensure it’s just another step in your property-buying journey.

What is stamp duty about?

Stamp duty got its name from the days when official documents were literally rubber-stamped to show that the property tax had been paid. Today, the fee is a $1.2 billion revenue source for the Western Australian Government that goes towards funding a lost list of essential public services. The tax applies to most property transactions, including residential, commercial and even vacant land.

In Western Australia, stamp duty must be paid within one month of the completed property transaction. This is an important deadline to keep in mind, as late payments can result in penalties, so most people pay stamp duty at settlement.

How is stamp duty calculated in WA? 

How much tax you will need to pay depends on several factors, including the property's value, the type of property you’re buying, and whether you're eligible for any concessions or exemptions.

The calculation of stamp duty in Western Australia is based on the purchase price, or market value, whichever is higher. Since the rates are progressive, the percentage of stamp duty payable increases as the property price goes up.

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

Example case study

Isaac and Ava are buying a home valued at $500,000. They are not eligible for any exceptions or concessions so they consulted a stamp duty calculator to plan out what their up-front purchasing costs would be.

In their circumstance, the first $360,000 of the purchase price would attract a $11,115 fee. The remaining $140,000 would then be calculated at 4.75%, coming to a total of $6650. All up, their total stamp duty payable would be $17,765.

Stamp duty concessions and exemptions in WA

In certain cases, some buyers are exempt from paying stamp duty all together, while others only have to pay a fraction of the fee. In May 2024, as part of the State Budget, the Western Australian Government lifted the stamp duty thresholds for first-home buyers of established and new properties under the value of $450,000, resulting in savings of up to $15,390.

To qualify for an exemption or discount you must:

• Buy your first home under $450,000 to skip the whole duty, or purchase between $450,001 and $600,000 for the concessional rate.
• Purchase or enter into an under construction contract for a new residential unit or apartment off-the-plan before 30 June, 2025.
• Qualify for the Family Farm Exemption, which is for eligible individuals purchasing farming property from a family member.
• Buy vacant land under $300,000 for a complete exemption or apply for a reduced rate when purchasing property valued up to $400,000.

On the flip side, foreign buyers may be required to pay additional duties, so it’s essential to factor this into your budget if you’re not an Australian citizen or the holder of a permanent resident visa. 

Budgeting for stamp duty

Unless you qualify for an exemption, stamp duty is an unavoidable 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 least afford it.

Use an online calculator specific to Western Australia so you have an accurate estimate of how much you will need to pay. Once you know the amount, factor it into your upfront costs, this way you won’t be borrowing to pay the bills.

Finally, speak to a professional such as a conveyancer, solicitor or mortgage broker to provide you with detailed advice tailored to your situation.