Everything You Need to Know About Stamp Duty Exceptions

Stamp duty is often the largest upfront cost outside the deposit when buying a home in Castle Hill. A full exemption or concession can change what you're able to afford and how quickly you can settle.

NSW offers a full stamp duty exemption on new and established homes valued up to $800,000 for eligible first home buyers. Between $800,001 and $1,000,000, a sliding concession applies. For vacant land, a full exemption applies up to $350,000 with a concession available between $350,001 and $450,000. You need to move into the home within 12 months of settlement and live there as your principal place of residence for at least 12 continuous months.

What the Full Exemption Looks Like in Practice

Consider a buyer purchasing an established townhouse in Castle Hill at $780,000. Under the First Home Buyers Assistance Scheme, they pay no transfer duty. Without the exemption, standard duty would be roughly $30,500. That $30,500 can instead cover settlement costs, furniture, or remain in an offset account to reduce interest from day one.

The exemption applies automatically at settlement if you meet the eligibility criteria. Your conveyancer lodges the application with Revenue NSW on your behalf. You don't apply separately or pay upfront and claim a refund later.

How the Sliding Concession Works Between $800,000 and $1,000,000

The sliding concession reduces duty proportionally as the property value increases. A home purchased at $850,000 attracts duty somewhere between zero and the standard rate, calculated on a sliding scale. A home purchased at $950,000 attracts more duty than the $850,000 property, but still less than the full amount.

At $1,000,000 or above, no concession applies and you pay standard transfer duty rates. If you're weighing up properties near that threshold, the difference in duty can be several thousand dollars and may influence which property makes more sense financially.

Castle Hill Property Values and Duty Thresholds

Castle Hill sits within the Hills District, known for family homes, townhouses, and low-rise apartment developments near Castle Towers and the Old Northern Road precinct. Properties in established pockets such as around Glenhaven Road or closer to Kellyville Ridge frequently sit in the $900,000 to $1,200,000 range, placing many established homes above the full exemption threshold but within reach of the sliding concession.

New townhouses and apartments, particularly those built in the last few years near Castle Hill Station or along the North West Metro corridor, may still fall within the $800,000 exemption cap depending on the development and floor plan. Vacant land in surrounding areas such as Baulkham Hills or Kellyville can also fall within the $350,000 exemption threshold, though supply is limited and often subject to competition.

Combining Stamp Duty Relief with the Australian Government 5% Deposit Scheme

The NSW stamp duty exemption and concession can be used alongside the Australian Government 5% Deposit Scheme. That scheme allows eligible first home buyers to purchase with a 5% deposit without paying lenders mortgage insurance, with Housing Australia providing a guarantee to the participating lender.

In NSW, the property price cap for the 5% Deposit Scheme is $1,500,000 in capital cities and regional centres, and $800,000 in other areas. Castle Hill falls within the Sydney metropolitan area, so the $1,500,000 cap applies. The combined deposit and guarantee reach 20% of the property value, removing the need for LMI.

If you're buying an established home at $780,000, you could use the 5% Deposit Scheme to purchase with a $39,000 deposit, avoid LMI, and pay no stamp duty. The only upfront costs would be settlement fees, building and pest inspections, and any loan establishment costs.

What Happens if You Don't Occupy the Property Within 12 Months

The 12-month occupancy requirement is strict. If you don't move in within 12 months of settlement and reside there continuously for at least 12 months, Revenue NSW can claw back the exemption or concession. You would then be liable for the full duty amount plus interest and penalties.

Circumstances such as delayed construction, employment relocation, or family changes don't automatically extend the timeframe. If you anticipate a delay, contact Revenue NSW before the 12-month period expires. In some cases, an extension may be granted, but it's not automatic and requires supporting documentation.

Vacant Land Concessions and Build Timelines

If you're purchasing vacant land with the intention to build, the same occupancy requirement applies. You must occupy the completed home as your principal place of residence within 12 months of settlement on the land, and live there continuously for at least 12 months.

That timeline can be tight if construction is delayed. In our experience, buyers purchasing land and engaging a builder should factor in at least eight to ten months for the build, plus council and certification delays. If settlement on the land occurs in January and the build takes eleven months, you're already outside the 12-month window before you've moved in.

One option is to delay settlement on the land until the build contract is signed and the timeline is clearer. Another is to negotiate a longer settlement period with the vendor. Both approaches require coordination between your conveyancer, builder, and lender.

First Home Owner Grant Eligibility and Stamp Duty Relief

The NSW First Home Owner Grant is $10,000 and applies only to new builds or substantially renovated homes. The purchase price cap is $600,000, or a combined land and build cap of $750,000. The grant does not apply to established homes.

You can access both the grant and the stamp duty exemption or concession on the same transaction, provided the property meets the criteria for both schemes. A new townhouse purchased at $580,000 would attract the $10,000 grant and a full stamp duty exemption. A new townhouse at $850,000 would not qualify for the grant but would still receive the sliding stamp duty concession.

Applications for the grant are made through Revenue NSW and are typically processed at settlement. Your conveyancer coordinates the application.

What Counts as a First Home Buyer in NSW

To qualify for the stamp duty exemption or concession, you and anyone else named on the title must be a natural person who is an Australian citizen or permanent resident. None of you can have previously owned residential property in Australia or abroad, either solely or jointly, including any interest acquired through a deceased estate, court order, or company shareholding.

If you owned a property overseas, even decades ago, you're ineligible. If you inherited a share in a property and held it for any period before selling, you're ineligible. Revenue NSW interprets prior ownership broadly, and the onus is on the buyer to disclose any prior interest.

If you're purchasing with a partner or spouse, both of you must meet the first home buyer definition. If one of you has owned property before, the transaction is ineligible for the concession.

How This Affects Your Borrowing Capacity and Loan Structure

Saving $30,000 in stamp duty gives you more funds to put toward your deposit, which can reduce your home loan amount and improve your loan-to-value ratio. A lower LVR may also give you access to better interest rates or remove the need for LMI if you're close to the 80% threshold.

Some buyers prefer to keep those savings in an offset account linked to their loan rather than adding them to the deposit. That approach maintains liquidity while still reducing the interest charged on the loan balance. Others use the savings to move from a 10% deposit to a 15% deposit, which can unlock a lower rate or waive certain lender fees.

Your broker can model both scenarios and show you the total interest cost and repayment amount under each structure. The decision depends on your cash flow, risk tolerance, and whether you're likely to need access to those funds in the next few years.

Off-the-Plan Purchases and Duty Concessions in Other States

NSW does not currently offer a specific off-the-plan stamp duty concession separate from the First Home Buyers Assistance Scheme. Other states, including Victoria, Western Australia, and the ACT, have introduced targeted concessions for off-the-plan purchases to encourage new housing supply.

If you're considering an off-the-plan apartment or townhouse in Castle Hill, the standard first home buyer exemption or concession applies based on the dutiable value at the contract date. The contract price is the dutiable value, not the value at settlement. If the property is valued at $780,000 when you sign the contract, you pay no duty, even if the market value increases by the time you settle two years later.

Call one of our team or book an appointment at a time that works for you. We'll confirm your eligibility across all state and federal schemes, help structure your deposit to work within the relevant caps, and connect you with lenders who participate in the 5% Deposit Scheme if that suits your circumstances.

Frequently Asked Questions