Stamp Duty on Investment Property: What You'll Pay

How Stamp Duty Works for Investment Properties

When you buy an investment property in Australia, you pay stamp duty (transfer duty) to the state or territory government. The amount depends on the purchase price, the state the property is in, and whether you are an Australian resident or foreign buyer.

The base stamp duty rates are the same for investors and owner-occupiers in most states. But here is what catches many investors off guard: you do not qualify for any of the concessions designed for owner-occupiers and first home buyers. No exemptions, no discounts, no threshold concessions. You pay the full standard rate on every dollar of the purchase price.

On top of stamp duty, investors face land tax — an annual tax on the unimproved value of the land, which owner-occupiers are exempt from on their home. Combined, these two costs significantly change the upfront and ongoing economics of property investment compared to buying a home to live in.

State-by-State Comparison

This table shows the stamp duty payable on a $600,000 investment property across all Australian states and territories, along with the top marginal duty rate, foreign buyer surcharge, and land tax threshold.

Rates current as at 1 July 2025. Foreign surcharge applies on top of standard duty. Land tax is annual and applies to unimproved land value, not purchase price.

NSW — Highest Foreign Surcharge, Generous Land Tax Threshold

New South Wales applies a sliding scale of transfer duty rates from 1.25% on the first $17,000 up to 7% on amounts above $3,721,000 (the premium rate that applies from FY 2025-26). For a typical $750,000 investment property, expect to pay around $29,585 in stamp duty.

NSW has the highest foreign buyer surcharge in the country at 9%, increased from 8% in January 2025. Combined with standard duty, a foreign buyer purchasing a $750,000 property would pay approximately $97,085 — nearly 13% of the purchase price going to duty alone.

On the positive side, NSW has one of the most generous individual land tax thresholds at $1,075,000 (2026 assessment year). If your investment property's unimproved land value is below this, you pay no land tax. However, this threshold drops to $25,000 for properties held in a discretionary trust, with a 0.375% surcharge on top of standard land tax rates.

Victoria — Highest Ongoing Costs for Investors

Victoria applies rates from 1.4% to 6.5% on residential property. A $600,000 investment property incurs approximately $31,070 in stamp duty — the highest of any state at this price point. The rate structure applies a flat 5.5% on the portion between $960,001 and $2,000,000, then 6.5% above that.

The real sting for Victorian investors is land tax. The threshold is just $50,000 in unimproved land value — the lowest in the country. In practical terms, this means every investment property in Victoria triggers land tax. At current rates, a property with $400,000 in land value would incur roughly $2,975 in annual land tax. Over 10 years of ownership, that adds $29,750 to your holding costs on top of the stamp duty you paid upfront.

However, Victoria offers a temporary off-the-plan duty concession (until 20 October 2026) that is available to all buyer types, including investors. This concession deducts outstanding construction costs from the dutiable value, potentially reducing duty by $20,000 to $30,000 on apartments and townhouses purchased before construction is complete.

Queensland — Separate Rate Schedule for Investors

Queensland is notable for having different transfer duty rate schedules for owner-occupied and investment properties. When a property is not going to be your home, the standard (non-home) rates apply, which are higher than the concessional home rates. On a $600,000 property, an investor pays $20,025 compared to $12,850 for an owner-occupier — a $7,175 difference.

Queensland's land tax threshold for individuals is $750,000, among the higher thresholds in Australia. But beware: the threshold drops to $350,000 if you hold property through a trust, and the top marginal rate is 3.7% — the highest in the country for very high-value portfolios. Queensland also does not offer any off-the-plan concessions for investors.

From 1 May 2025, Queensland introduced significant first home buyer concessions: zero duty on new homes (no price cap) and zero duty on established homes under $700,000. These changes do not help investors, but they increase competition from first home buyers in the sub-$700,000 price bracket.

South Australia — No Concessions, but Commercial Property Is Exempt

South Australia applies a sliding scale from 1% to 5.5% with no distinction between investor and owner-occupier rates. A $600,000 investment property attracts approximately $26,830 in stamp duty. There are no off-the-plan concessions or investor-specific reductions.

The land tax threshold for individuals is $833,000 (2025-26), which is relatively generous. Rates reach up to 2.4% on high-value holdings. South Australia does not impose a foreign buyer land tax surcharge, making it more attractive than eastern seaboard states for overseas investors.

The standout feature for SA investors is the complete exemption of commercial and industrial property from stamp duty, in place since 1 July 2018. If you are investing in commercial real estate — offices, warehouses, retail premises — South Australia charges zero transfer duty. This is a permanent exemption, not a temporary concession.

Western Australia — Lowest Top Rate, Off-the-Plan Savings

Western Australia has the lowest top marginal transfer duty rate on the mainland at 5.15%. A $600,000 investment property incurs approximately $21,965 in stamp duty. Rates are the same for investors and owner-occupiers.

WA offers off-the-plan stamp duty concessions that are available to all buyer types, including investors with no residency requirement. Pre-construction apartments can receive up to 100% exemption, while properties under construction qualify for a 75% concession on properties up to $800,000. This concession is currently set to expire on 30 June 2026, with a proposed extension to June 2028.

Land tax thresholds start at $430,000 with rates up to 2.67%. The foreign buyer surcharge is 7% (stamp duty only — WA does not impose a foreign buyer land tax surcharge).

Tasmania — Lowest Rates in the Country

Tasmania has the lowest stamp duty rates in Australia, with a top marginal rate of 4.5%. A $600,000 investment property incurs approximately $22,497 in duty. There is no distinction between investor and owner-occupier rates.

Tasmania also offers a 50% stamp duty reduction for off-the-plan apartments and units purchased before completion, available to all natural persons (including investors) on properties up to $750,000. This concession runs until 30 June 2026.

Land tax thresholds are relatively generous at $750,000, with a top rate of 1.5%. The foreign buyer stamp duty surcharge is 8%, with an additional 2% land tax surcharge (introduced in July 2022). Tasmania's lower rates and moderate land tax make it worth considering for investors who can manage interstate property, though rental yields and capital growth should be the primary decision drivers.

ACT — Transitioning Away from Stamp Duty

The ACT is unique in Australia: it is progressively abolishing stamp duty and replacing it with higher annual land taxes (general rates). Stamp duty rates have been falling each year as part of this long-term reform, with the top rate currently at 4.54%.

A $600,000 investment property attracts approximately $20,400 in stamp duty — one of the lowest upfront costs in the country. However, the tradeoff is that all investment properties in the ACT are subject to annual land tax (general rates) with no threshold. Even a modest investment property will incur $2,000 to $4,000 per year in rates, depending on its unimproved value.

The ACT does not impose a foreign buyer stamp duty surcharge (the only jurisdiction other than the NT), though a 0.75% foreign owner land tax surcharge applies. For investors planning to hold long-term, the lower upfront stamp duty may not compensate for decades of higher annual rates.

Northern Territory — No Land Tax, No Foreign Surcharge

The Northern Territory uses a formula-based calculation for stamp duty that results in rates of approximately 5% to 6% on most property values. A $600,000 investment property incurs approximately $23,929 in stamp duty — mid-range compared to other jurisdictions.

Where the NT stands out is in what it does not charge. There is no land tax in the Northern Territory — for any property type, at any value. There is also no foreign buyer stamp duty surcharge and no foreign owner land tax surcharge. This combination makes the NT the most investor-friendly jurisdiction in Australia from a tax perspective, particularly for foreign buyers who face surcharges of 7% to 9% in every other state.

The obvious tradeoff is that the NT property market is smaller, less liquid, and subject to different economic drivers than the southern capitals. Lower tax costs alone do not make a good investment if the property does not deliver adequate rental yield and capital growth.

Land Tax — The Ongoing Cost Most Investors Underestimate

Stamp duty is a one-off cost at purchase. Land tax is the ongoing cost that many first-time investors fail to factor into their rental yield and cash flow calculations. As an investor, you pay land tax annually on the unimproved value of the land your property sits on. Owner-occupiers are exempt on their principal place of residence — investors are not.

Land tax is assessed on the total unimproved land value of all your investment properties in a state, not on each property individually. If you own three properties in Victoria with combined land values of $900,000, all three are taxed on a single assessment at higher marginal rates. This aggregation means each additional property pushes your total holding into higher tax brackets.

Land tax is deductible against your rental income, unlike stamp duty. This makes land tax a less painful cost in practice, as it reduces your taxable rental income each year. However, it still reduces your net cash flow and should be modelled in any investment feasibility analysis.

Is Stamp Duty Tax-Deductible on an Investment Property?

No. This is one of the most commonly misunderstood aspects of property investing. The ATO classifies stamp duty as a capital cost, not an ongoing expense. You cannot deduct stamp duty from your rental income in the year you purchase the property, and it is not depreciable.

Instead, stamp duty is added to the property's cost base for capital gains tax (CGT) purposes. When you eventually sell the investment property, the stamp duty you paid at purchase increases your cost base, which reduces the capital gain you are taxed on.

What IS deductible: Land tax, property management fees, insurance, council rates, repairs and maintenance, loan interest, and depreciation of the building and fixtures. These ongoing costs can be claimed annually against rental income, which is why many investment properties are negatively geared — the deductible expenses exceed the rental income, creating a tax loss.

Buying Through a Trust or Company

Many property investors consider buying through a discretionary (family) trust or company structure for asset protection and tax planning. The stamp duty implications vary significantly by state and can create unexpected costs.

Discretionary trusts

In NSW, holding investment property through a discretionary trust dramatically worsens your land tax position. The individual threshold of $1,075,000 drops to just $25,000 for trusts, and an additional 0.375% surcharge applies above that threshold. A property with $500,000 in land value would incur approximately $5,700 per year in land tax through a trust, compared to $0 if held by an individual (below the threshold). Over 10 years, that is $57,000 in additional costs.

In Victoria and Queensland, trusts are treated more comparably to individuals for stamp duty purposes. Queensland applies the same land tax rates, though the threshold drops from $750,000 to $350,000 for trusts. Victoria applies the same $50,000 threshold regardless of whether property is held individually or through a trust.

Company structures

Companies avoid the trust-specific land tax penalties in NSW but lose access to the 50% CGT discount available to individuals and trusts distributing to individuals. This means a company pays tax on 100% of any capital gain at the company tax rate (25% for base rate entities). Whether this is better or worse than an individual structure depends on your marginal tax rate, planned holding period, and overall portfolio strategy. This is a decision to make with your accountant, not based on stamp duty alone.

Strategies to Reduce Stamp Duty on Investment Property

Unlike first home buyers, investors have limited options for stamp duty concessions. But there are legitimate strategies that can reduce the amount you pay.

1. Buy off-the-plan (VIC, WA, TAS)

Victoria, Western Australia, and Tasmania all offer off-the-plan stamp duty concessions that are available to investors. Victoria deducts outstanding construction costs from the dutiable value. Western Australia provides up to 100% exemption on pre-construction strata properties. Tasmania gives a 50% duty reduction. These concessions are temporary and most expire in mid-to-late 2026 — act before the deadlines if this strategy appeals to you.

2. Buy commercial property in SA

South Australia exempts commercial and industrial property from stamp duty entirely. If you are investing in commercial real estate, purchasing in SA avoids the duty cost altogether. Victoria is also transitioning commercial property to an annual tax model where subsequent sales are exempt from duty.

3. Consider the property value carefully

Stamp duty is calculated on marginal rate brackets in most states. There is no magic threshold where a small price reduction yields a large duty saving (unlike first home buyer concessions, which have hard cutoffs). However, negotiating a lower purchase price always reduces your stamp duty proportionally. A $20,000 price reduction on a $600,000 property saves approximately $1,000 to $1,200 in stamp duty depending on the state.

4. Separate chattels from the purchase price

Stamp duty is charged on the value of the real property (land and buildings), not on chattels (moveable items like blinds, curtains, dishwashers, and furniture). If the vendor is including significant chattels in the sale, having them valued separately and excluded from the property transfer value reduces the dutiable amount. This must reflect genuine market value — inflating chattel values to reduce duty is tax avoidance and can attract penalties.

5. Invest in states with lower rates

If your investment strategy is flexible on location, stamp duty and land tax costs vary enough between states to affect your returns. The difference in stamp duty on a $600,000 property between Victoria ($31,070) and Queensland ($20,025) is $11,045. Add in Victoria's lower land tax threshold and the ongoing cost gap widens each year. This should not override fundamental investment criteria like rental yield, vacancy rates, and growth prospects, but it is worth factoring in.

Commercial vs Residential Investment Property

Commercial investment property is treated differently from residential in several states, and in most cases, more favourably.

For investors who are open to commercial property, the absence of foreign buyer surcharges and the SA exemption represent genuine cost advantages. Victoria's commercial and industrial property tax reform is particularly significant — after the initial "entry transaction," subsequent sales of the same property are permanently exempt from stamp duty. A government transition loan is available to finance the entry duty over 10 years at a fixed market rate.