When you buy a new or used vehicle, you will need to pay stamp duty. This is a type of tax imposed by state and territory governments that's added to the total cost of purchasing a vehicle.
So, when you look at a car's asking price, make sure you factor in the stamp duty to ensure you have the budget for it. The amount of stamp duty you pay depends on where you live and either the purchase price or the vehicle's market value.
This article covers everything you need to know about paying stamp duty in Australia, including how to calculate stamp duty in each territory.
What Is Motor Vehicle Stamp Duty?
Stamp duty is a one-off tax applied to several types of goods, including when you buy a new or used vehicle. Although most people associate it with houses, you also need to pay vehicle stamp duty every time you purchase a passenger vehicle or commercial vehicle.
Motor vehicle stamp duty covers the cost of transferring ownership of a vehicle. So, if you transfer registration or sell your car to someone else second-hand, you will be subject to stamp duty, contributing to the transfer fee. Buyers must also pay stamp duty on new vehicles bought from a dealership.
Typically, motor vehicle duty is calculated based on the value of the vehicle, using either the market value or the purchase price. The 'dutiable value' refers to the duty payable depending on how the state calculates stamp duty. The exact rate varies from state to state.
Do I Have to Pay Stamp Duty?
If you are purchasing a new or used vehicle in Australia, then you must pay motor vehicle duty. Usually, this applies to any car, be it a passenger vehicle, motorcycle, or even camper. Some states see non-passenger vehicles and trailers as exempt, however.
There are some other instances where the buyer may be exempt from paying stamp duty. However, these exemptions vary from state to state. Check out the sections below to learn about the costs and exemptions in each state or territory.
How Much Stamp Duty Do I Need to Pay?
Stamp duty is calculated differently in each state. While in some states, the process is incredibly straightforward, others have a relatively complicated process. NSW, for example, has a simple system based on a percentage of the price, while some cars in Western Australia require you to calculate vehicle stamp duty using a specific formula.
You can usually figure it out without using a stamp duty calculator; here's how the situation looks in each state or territory.
New South Wales
In New South Wales, stamp duty depends straightforwardly on the price you pay for the car. For a new vehicle, stamp duty is based on the vehicle's full value. For a used vehicle, it is calculated on the purchase price or current value, whichever is greater.
- Under $45,000: 3%
- $45,000+ : $1350 + 5%
Caravans, trailers, and campers are usually exempt from stamp duty, along with HGVs over 4.5 tonnes. Furthermore, DVA pensioners may be exempt. There is a full list of concessions and exemptions on the NSW government website. The site also features a handy calculator to help you figure out how much stamp duty you owe.
Queensland
In Queensland, stamp duty is calculated according to the number of cylinders the car has and its dutiable value. The dutiable value refers to the list price or market value depending on whether the vehicle is new, used, or modified for a person with a disability.
The breakdown is as follows:
- Hybrid and electric vehicles: 2%
- 1-4 cylinders: 3%
- 5-6 cylinders: 3.5%
- 7+ cylinders: 4%
There is a long list of possible exemptions in Queensland, including:
- If the vehicle is part of a divorce settlement
- If the vehicle was a gift from a relative
- If the vehicle is already registered in Queensland or interstate
- If you're a car salesperson
- Commercial vehicles sold as part of a company restructuring
- If the vehicle is used by a charity
- If the previous owner has died, lost one or both legs, or is ex-military
Senior citizens get a discount on stamp duties but are not exempt.
Australian Capital Territory
In the Australian Capital Territory (ACT), motor vehicles are graded according to their eco-friendly status, and the stamp duty payable is calculated on this basis.
- Grade A (0-130 CO2 emissions per km): No stamp duty
- Grade B (131-175 CO2 emissions per km): $1 per $100 or part of $100 of the value of the vehicle
- Grade C (176-220 CO2 emissions per km): $3 per $100 or part of $100 of the value
- Grade D (200+ CO2 emissions per km): $4 per $100 or part of $100 of the value
These amounts all increase for vehicles valued at over $45,000. Again, Grade A vehicles are exempt from stamp duties, and the other costs are as follows:
- Grade B: $450 plus $2 per $100 or part of $100 of the value
- Grade C: $1350 plus $5 per $100 or part of $100 of the value
- Grade D: $1800 plus $5 per $100 or part of $100 of the value
The ACT also has a long list of potential exemptions. You can see the full breakdown of payments and exemptions here.
Tasmania
Tasmania bases stamp duty on a car's market value. The system is quite straightforward for cars up to $34,999 and those over $45,000. For vehicles valued in between, there are a few more calculations involved. Stamp duty depends on the value of the vehicle as follows:
- Up to $600: Flat fee of $20
- $600 - $34,999: 3%
- $35,000 - $39,999: Flat fee of $1,050 plus $11 per $100 or part thereof over $35,000
- $45,000+ : 4%
Tasmania also has a long list of stamp duty exemptions. They are mostly similar to New South Wales and Queensland.
Northern Territory
In the Northern Territory, stamp duty is always 3% of the dutiable value of the vehicle. However, the dutiable value varies depending on the nature of the transaction, altering the stamp duty payable.
- Arm's length transaction: The buyer and seller have independent interests. This type of transaction includes a car dealer selling to a member of the public or a previous owner selling a used car to a new owner to whom they have no relation. In this case, the sale value dictates the dutiable value.
- Non-arm's length transaction: The buyer and seller share interests, e.g. they are related or work for the same company. In this instance, the market value dictates the dutiable value.
Again, the stamp duty exemptions are largely similar to those in other states.
South Australia
South Australia gives different stamp duty rates to commercial vehicles and non-commercial vehicles. The rates are the same for all types of vehicles, up to $3000.
- $1000 or less: $1 for every $100, with a minimum of $5
- $1000 - $1,999: $10 plus $2 per $100 or part of $100 over $1000
- $2000 - $2,999: $30 plus $3 per $100 or part of $100 over $1000
For commercial vehicles, the rate remains the same thereafter. For non-commercial vehicles valued over $3000, the rate is $60 plus $4 per $100 or part of $100 over $1000.
South Australia has similar stamp duty exemptions to other states. However, one notable exception is buses, vehicles owned by the crown, repossessed vehicles, and vehicles owned by the council. Some car owners are, therefore, exempt if they own a particular type of commercial vehicle.
Victoria
Victoria's stamp duty laws are slightly complicated. You may need a stamp duty calculator to help you figure out how much you owe.
Passenger vehicles are valued depending on if they are new or used cars, and the thresholds for value change regularly. Non-passenger vehicles and motorcycles have a rate of $5.40 per $200, and all other vehicles have a rate of $8.40 per $200.
Visit the Victoria government website for more information on your vehicle's stamp duty for the most up-to-date information on pricing.
Exemptions are similar to other states; you do not need to pay if the motor vehicle was part of a divorce settlement, is used for charitable purposes, or is used in primary production. This includes primary producer passenger vehicles used to transport farm workers between different areas of the farm.
You can also get a reduction in stamp duty for 'green' passenger cars with eco-friendly credentials.
Western Australia
Car stamp duty in Western Australia depends on the vehicle's weight and its dutiable value. Heavy vehicles with a gross mass of over 4.5 tonnes have a flat rate of 3% to a maximum of $12,000.
For light vehicles, the dutiable value is based on the manufacturer's list price for new cars or the reasonable market value of a used car. You need to pay based on the following:
- Up to $25,000: $2.75 per $100
- $25,001 - $50,000: 2.75% + ((dutiable value - 25,000)/6,666.66)
- $50,0001+ : 6.5%
Exemptions are available if:
- The motor vehicle is part of a divorce settlement
- There is charitable use of the car
- The vehicle is an asset in a company restructuring
- A caravan or trailer owner decides to transfer ownership
Will Anyone Know If I Don't Pay Stamp Duty?
It's always best to pay the necessary stamp duty that you owe. If you are caught without paying it, then you will also have to pay interest on the amount.
There is usually a time period given for you to pay it. Usually, this is around 14 days from when you purchased the vehicle.
How Do I Pay Stamp Duty?
Typically, you pay the stamp duty you owe through the local government website where you live and where the car is or will be registered. Check out your local government site for more information on how to pay motor vehicle duty.
When buying a car registered in another state, you need to pay the stamp duty to the government where you live. For example, if someone lives in Queensland and buys a car from New South Wales, the buyer pays stamp duty to the Queensland government.
Summary
In short, you owe stamp duty whenever you buy a new vehicle or used car in Australia. The exact amount varies in different states and territories, and many localities also have exemptions from stamp duty for certain groups or sales types.
Make sure you are familiar with the regulations in your locality and visit the local government site to pay any stamp duty that you owe.
Check out our other car-buying guides to make the process of purchasing your new vehicle as simple as possible.
