Stamp Duty on Commercial Property in Australia: What Buyers Need to Know
General information only, not financial, tax or legal advice. Duty rates, thresholds, concessions and reform timetables are set by each state and territory and change regularly, so every figure in your own deal must be confirmed with the relevant revenue office or your accountant. Speak to a licensed adviser about your own situation.
TL;DR
Stamp duty on commercial property is a state and territory tax on the transfer of land, and it is usually the single largest transaction cost in a commercial purchase. It is calculated on the dutiable value of the property, generally the greater of the purchase price or market value, and it is charged on sliding scales that differ in every jurisdiction. Commercial buyers do not get the first home, principal residence or pensioner concessions that reduce duty for residential buyers. Duty may also apply when you buy units or shares in an entity that holds land, known as landholder duty. The buyer pays, usually at or shortly after settlement, in cash. Always check current rates with the revenue office in the state where the property sits.
What stamp duty on commercial property actually is
Stamp duty is a tax on a transaction, not on income or profit. When land changes hands, the state or territory where that land sits levies duty on the transfer. There is no federal commercial property duty, which is why the answer to "how much is stamp duty" always starts with "which state".
Each jurisdiction runs its own legislation, its own rate scales, its own definitions and its own concessions. Two identical warehouses at the same price, one in Parramatta and one in Dandenong, can carry materially different duty bills.
The tax also goes by different names. Some jurisdictions call it transfer duty, some call it land transfer duty, some still call it conveyance duty, and most people call all of it stamp duty. The name on the revenue office website is what you need when you go looking for current rates.
How duty on a commercial purchase is calculated
The mechanism is consistent across the country even though the numbers are not.
Dutiable value, not just the price you paid
Duty is generally assessed on the dutiable value of the property, which is the greater of the consideration you paid or the unencumbered market value of what you acquired. A bargain price between related parties does not produce a bargain duty bill. If you buy from a family trust, a related entity, or a vendor with a reason to be generous, expect the revenue office to want a valuation.
Rates are then applied on a progressive, sliding scale. Duty rises faster than price, so the effective rate on a larger asset is typically higher than on a smaller one.
Aggregation of multiple purchases
Most jurisdictions can aggregate separate transactions that form, in substance, one arrangement. Buying three adjoining titles from the same vendor under three contracts will not usually be assessed as three small purchases. Expect them to be added together and assessed at the top of the scale.
Any commercial property stamp duty calculator is an estimate
Every revenue office publishes a calculator, and they are the right place to start. Treat the output as an estimate, not an assessment. A calculator does not know about aggregation, GST treatment, fixtures and plant included in the price, or whether your structure triggers a surcharge. The assessment that matters is the one the revenue office issues.
Commercial buyers do not get the residential concessions
This is where residential investors moving into commercial property get the biggest shock. The concessions that soften duty on a home purchase are, almost without exception, tied to residential land and owner-occupation.
Concessions that generally do not apply to a commercial purchase include:
First home buyer exemptions and concessions
Principal place of residence concessions
Off-the-plan and new home concessions
Pensioner and downsizer concessions
There are relief provisions that can be relevant to commercial buyers, including corporate reconstruction relief for transfers inside a group, primary production or farmland provisions, and exemptions for charities and some not-for-profits. These are narrow, conditional, and must be checked before you sign, not after. Your ownership structure is often what determines whether any of them are available at all.
Who pays, when it falls due, and how it is funded
The buyer pays. In practice duty is settled through your conveyancer or solicitor as part of the settlement process, and the transfer cannot be registered until duty is paid or the revenue office has stamped the dealing.
Liability usually arises on the date of the contract rather than the date of settlement, and the payment window is short, commonly between 30 days and three months depending on the jurisdiction. On a long settlement, that distinction matters, because duty can fall due before you take possession or collect a cent of rent.
Duty is also one of the costs you cannot borrow against the property. Lenders lend against value, so duty has to come out of cash or equity you have already arranged. Working through your finance structure early is what keeps a deal from falling over at the funding line.
GST and duty: the figure the duty is assessed on
Duty is generally assessed on the GST-inclusive consideration where GST applies to the sale. On a seven figure purchase, having duty calculated on a figure that includes GST is not a rounding error.
This is one reason the GST treatment of a commercial contract deserves real attention. Where a tenanted property is sold as a GST-free supply of a going concern, there is no GST in the price, so the dutiable amount is lower. Where the vendor applies the margin scheme or charges GST, the price, and therefore the duty, is higher.
You may be able to claim the GST back as an input tax credit if you are registered and the property is used in your enterprise, but you do not get the duty back. The GST position on a commercial deal should be settled in the contract, not assumed.
State and territory revenue offices and what each calls the tax
Use this table to go straight to the right source. Rates, thresholds, surcharges and concessions change, often at budget time, so check the current position directly with the revenue office for the state or territory where the property is located before you rely on any number.
New South Wales: Revenue office: Revenue NSW; Name used for the tax: Transfer duty
Victoria: Revenue office: State Revenue Office Victoria; Name used for the tax: Land transfer duty (commonly stamp duty)
Queensland: Revenue office: Queensland Revenue Office; Name used for the tax: Transfer duty
Western Australia: Revenue office: RevenueWA; Name used for the tax: Transfer duty
South Australia: Revenue office: RevenueSA; Name used for the tax: Stamp duty (conveyance duty)
Tasmania: Revenue office: State Revenue Office Tasmania; Name used for the tax: Property transfer duty
Australian Capital Territory: Revenue office: ACT Revenue Office; Name used for the tax: Conveyance duty
Northern Territory: Revenue office: Territory Revenue Office; Name used for the tax: Stamp duty
If you are searching for stamp duty on commercial property in NSW, the phrase to use is transfer duty, and Revenue NSW is the authority. Searching the wrong term is how buyers end up reading a blog post from 2019 instead of the current schedule.
The reform story: upfront duty versus an annual property tax
Upfront duty is widely criticised by economists for discouraging property from moving to its most productive owner, and several jurisdictions have moved to replace or reduce it.
Two directions of travel are worth knowing about. Some jurisdictions have legislated a shift for commercial and industrial land away from a large one-off duty payment toward an annual property tax that applies after a transition period, with duty payable one last time on a qualifying transaction. Others have progressively reduced or removed duty on non-residential transfers, in some cases below a set value.
The practical point is not the detail, because the detail is in flux. It is that the duty position in a given state may have changed since the last time you or your accountant looked at it, and the difference between a one-off duty bill and an ongoing annual tax changes your holding costs, your yield maths and your exit planning. Confirm the current position for your state before you model the deal, and factor any annual impost into your due diligence.
Landholder duty: when you buy the entity, not the property
You can acquire commercial property without ever signing a transfer of land, by buying the shares in a company or the units in a trust that owns it. Revenue offices closed that door a long time ago.
Most jurisdictions have landholder or land-rich provisions. In broad terms, if you acquire a significant interest in an entity whose land holdings exceed a set value or proportion, duty is assessed as though you had acquired the underlying land itself. The tests, the thresholds and the definition of a significant interest differ in every jurisdiction, and interests held by associates and related parties are commonly counted together.
Landholder duty catches more deals than people expect: buying out a co-investor, restructuring a syndicate, taking a stake in an entity that holds a portfolio. It is also where the largest unexpected duty assessments tend to come from. If the transaction is anything other than a straight purchase of a title, get specialist advice on duty before you sign.
Budgeting duty into total acquisition costs
Duty is the largest line in your acquisition budget, but it is not the only one. Model the whole cost of getting the asset settled, not just the purchase price.
A realistic acquisition cost list includes:
Transfer duty, assessed on dutiable value
Legal and conveyancing fees
Due diligence: building and pest, valuation, survey, environmental, lease review
Lender costs: application, valuation, and duty on any mortgage where it still applies
Buyer's agent or advisory fees, if you use one
Adjustments at settlement for rates, land tax, outgoings and rent
Working capital for vacancy, incentives or fit-out contributions
Say, as an example only, you are looking at a property at $1.2 million on a 7% net yield. Duty plus the costs above will add a meaningful amount of equity to the deal, and it is equity you do not recover on day one. That matters for your real entry yield and for how long the asset needs to be held before it has earned its own costs back.
One more point for your accountant: transfer duty is generally capital in nature, so it typically forms part of the cost base of the asset rather than an immediate deduction. It sits in a different category from the depreciation and outgoings you claim annually. Confirm the treatment for your structure with your adviser.
Where to go from here
Duty is one of a handful of costs that decide whether a commercial deal works, alongside finance, lease quality and the condition of the building. The buyers who get it right treat it as a line item they model before they offer, not a number they discover at settlement. If you are still mapping out the process, start with how to buy commercial property and the broader guide to commercial property investing in Australia.
If you want to see how an experienced buyer approaches the whole acquisition, Cal Doggett has spent 20+ years in Australian commercial property and has transacted over $550M. His Fortify Your Wealth video series walks through the fundamentals, and the Commercial Property Mastery course covers acquisition costs, structuring and due diligence in detail. Both are there when you are ready to look.
Frequently asked questions
How much is stamp duty on commercial property in Australia?
There is no single national figure. Duty is set by each state and territory on a sliding scale applied to the dutiable value of the property, so the same price produces different duty in different jurisdictions. Larger purchases attract higher effective rates. Use the calculator on the relevant revenue office website for a current estimate, then confirm it with your conveyancer.
Is stamp duty on commercial property different from residential?
The mechanism is similar but the outcome usually is not. Commercial buyers are generally assessed under the same transfer duty scales without access to first home buyer, principal place of residence, off-the-plan or pensioner concessions. Some jurisdictions treat non-residential land differently again, including reforms moving commercial land toward an annual tax, so check your state's current position.
Is stamp duty calculated on the GST-inclusive price?
Generally yes, where GST applies to the sale. Duty is usually assessed on the GST-inclusive consideration, which is one reason the contract's GST treatment matters so much. If the property is sold as a GST-free going concern, there is no GST in the price and the dutiable amount is lower. Confirm the position before exchange.
What is landholder duty?
Landholder duty, called land-rich duty in some jurisdictions, applies when you acquire a significant interest in a company or unit trust that holds land, rather than buying the land directly. Duty is assessed on the underlying land as if you had bought it. Thresholds and the definition of a significant interest vary by state, and associates' interests are often aggregated.
Can I include stamp duty in my loan?
Not directly. Lenders advance funds against the value of the property, so duty must generally be funded from your own cash or from equity released elsewhere. Some borrowers draw on equity in another asset to cover it. Either way, duty needs to be in your funding plan from the start, because it has to be paid before the transfer can be registered.
When is stamp duty payable on a commercial purchase?
Liability usually arises on the date of the contract, and the payment window is short, commonly between 30 days and three months depending on the jurisdiction. In practice your solicitor or conveyancer arranges payment around settlement, because the transfer cannot be registered until duty is paid. On a long settlement, confirm the due date early.