Quick answer
Transfer duty, commonly called stamp duty, is a state tax payable on most property purchases within a set period of settlement or the contract date, depending on the state. When cash is tied up, a short-term secured loan against property you own can pay the duty, keeping the purchase on track. It is repaid later from a refinance, a sale or business cash flow.
Key points
- Duty is set and collected by each state and territory revenue office
- Commercial and high-value purchases can attract large duty bills
- A secured loan can pay duty when cash is committed elsewhere
- Repay from a refinance, sale or cash flow
- Confirm the amount and due date with your conveyancer early
Why duty catches buyers out
Transfer duty is one of the largest costs of buying property in Australia, and one of the easiest to underestimate. It is calculated on the purchase price or the property’s value, using rates and thresholds set by each state and territory. On a substantial commercial or industrial purchase, the duty can run to a very significant sum.
Many lenders lend against the property’s value but will not fund the duty on top. That leaves the buyer to find it in cash, at exactly the moment when the deposit has been paid and the business has committed its reserves elsewhere.
Who collects duty
| State or territory | Revenue office |
|---|---|
| New South Wales | Revenue NSW |
| Victoria | State Revenue Office Victoria |
| Queensland | Queensland Revenue Office |
| Western Australia | Department of Finance (RevenueWA) |
| South Australia | RevenueSA |
| Tasmania | State Revenue Office Tasmania |
| Australian Capital Territory | ACT Revenue Office |
| Northern Territory | Territory Revenue Office |
Each publishes current rates, exemptions and payment timing. Some states have reformed or are reforming how duty applies to commercial and industrial property, so always check the latest position for the property’s location.
How a secured loan pays the duty
A short-term loan secured over property you already own provides cash for the duty, usually alongside other settlement costs. It is commonly structured as a second mortgage or caveat behind an existing home or investment loan, so nothing about the existing loan changes. Interest can be prepaid or added to the loan, and the balance is repaid when the exit arrives.
Common exits
- Refinancing the new property once it is settled and, for example, leased up or revalued.
- Selling another property that was always going to be sold.
- Business cash flow over the following months.
- A bank top-up once updated financials are available.
Check how quickly duty funding can be arranged against your settlement date.
An illustrative duty loan
Illustrative only. A manufacturing company buys a second factory to expand capacity. Its bank funds the purchase at its standard LVR, and the company pays the deposit from reserves. That leaves the transfer duty, which will fall due around settlement, with the company’s cash already committed to new equipment. A caveat loan over a director’s investment property covers the duty and legal costs, with interest prepaid for nine months. When the company’s equipment starts producing revenue and its bank agrees a top-up, the caveat loan is repaid and withdrawn.
Planning duty from the start
The cheapest duty loan is the one you plan for before exchange. When budgeting a purchase, list every cost to settlement: deposit, duty, GST if the sale is a taxable supply, legal costs, lender fees and adjustments. Our guide on planning for transfer duty on a business property purchase walks through it. If the budget relies on a secured loan for part of it, arrange it early so it is ready on the day.
Duty, GST and other settlement costs together
For commercial buyers, duty often arrives alongside GST on the price, adding to the settlement cash requirement. Both can be covered by one secured loan, with the GST portion repaid when the input tax credit comes back through the business’s activity statement. See GST on commercial property.
Mistakes to avoid
- calculating duty on the wrong basis or with an outdated rate
- assuming the main lender will fund duty without checking
- forgetting that duty can apply to some transfers between related entities
- leaving the duty loan until settlement week
Concessions and exemptions
Every state offers some duty concessions and exemptions, but most are aimed at home buyers, first home buyers or specific transfers such as some transfers between spouses. Business and commercial purchases usually pay full duty. Some states also apply surcharges to certain foreign purchasers. Your conveyancer will confirm whether anything applies to your transaction; do not assume a concession you have heard about elsewhere will apply to a business purchase.
Related-entity transfers
Moving a property from one entity in a group to another, for example from a director personally into a company or trust, can attract duty just like a sale to a stranger. Owners restructuring their property holdings sometimes overlook this. If a restructure is part of a refinance or a new loan, get advice on the duty consequences before documents are signed, and include any duty in the loan amount if it is to be funded.
How lenders view a duty loan
A lender funding duty looks at the same things as any secured loan: the property offered, the existing debt, the purpose and the exit. Because duty is a one-off cost with a clear amount and due date, the purpose is easy to evidence. The exit is the part to think through: what will repay the duty loan, and when? A clear answer makes approval simple.
Keep settlement on schedule
Duty is unavoidable, but it does not have to derail a good purchase. Tell us the purchase price, the duty estimate from your conveyancer, the settlement date and the property you can offer as security, and a specialist will tell you how quickly the funds can be arranged. You can enquire with no credit check, your details stay with one team, and accurate figures mean a faster, firmer answer. Arrange duty funding.
Frequently asked questions
When is stamp duty payable?
It depends on the state or territory and the type of transaction. In many cases it is due on or shortly after settlement. Your conveyancer will confirm the exact timing, and each state revenue office publishes its rules.
Can a lender pay duty directly?
Duty is usually paid through settlement or by your conveyancer. A secured loan can provide the funds so that payment is made on time.
Is stamp duty higher for commercial property?
Duty rates and thresholds vary by state and by property type. Some states have changed how commercial and industrial property is taxed in recent years, so check the current rules for the property's state.
Can stamp duty be added to my main purchase loan?
Some lenders allow it within their LVR limits, many do not. Where the main lender will not fund duty, a separate secured loan over other property is a common solution.
Prefer to start now? Enquire here
About 60 seconds. No credit check when you first enquire, and a secured lending specialist calls you back.