Stamp Duty & Foreign-Buyer Surcharge in Australia Explained
The sticker price is never the real price. For an overseas buyer, stamp duty plus the foreign-purchaser surcharge can add well over 10% — here's how it works, state by state.
Key takeaways
Overseas buyers pay ordinary stamp duty plus a foreign-purchaser surcharge on top. The surcharge is commonly around 7–8% of the price, and it varies by state. Several states also levy an annual land tax surcharge every year you hold as a foreign owner. A worked example shows the true all-in cost on an A$800,000 purchase. Timing around permanent residency can legitimately reduce or remove the surcharge.
The hardest number for an overseas buyer to pin down in Australia isn't the purchase price — it's everything stacked on top of it at settlement. On top of the ordinary stamp duty every buyer pays, foreign purchasers pay an additional foreign-purchaser surcharge, and in several states an annual land tax surcharge on every year they hold the property. Together these can add well over 10% to the cost of buying, and buyers who budget only for the price get a nasty shock weeks before settlement.
This guide breaks the duty down into its layers, shows how it differs by state, and runs a full worked example so you can see the real all-in number. Rates change and differ by state, so treat the figures as indicative and confirm the current position with your solicitor and the relevant state revenue office.
1. The layers of duty an overseas buyer pays
It helps to see the cost as three separate layers, because they're charged under different rules:
Ordinary stamp duty (transfer duty) — paid by every buyer, calculated on a sliding scale that rises with the purchase price;
Foreign-purchaser additional duty — a surcharge paid only by foreign persons, typically around 7–8% of the price, on top of ordinary duty, due at settlement;
Annual land tax surcharge — in several states, an extra land tax charged each year you hold the property while you remain a foreign owner.
The first is a one-off most buyers expect. The second is the big one-off overseas buyers forget. The third is the ongoing cost almost nobody factors into their yield calculation — and it quietly erodes returns year after year.
2. How it differs by state
The surcharge rate is set by each state, so where you buy changes the number materially:
New South Wales (Sydney) — foreign-purchaser surcharge around 8% of the price, plus an annual land tax surcharge;
Victoria (Melbourne) — foreign-purchaser additional duty around 8%, plus an annual absentee-owner land tax surcharge;
Queensland (Brisbane) — additional foreign acquirer duty in the 7%–8% range, plus a land tax surcharge;
Western Australia (Perth) and South Australia — foreign-buyer duty surcharges apply at their own rates, some lower than the eastern states.
Because the surcharge is a percentage of price, the gap between states is large in dollar terms. A one-point difference on an A$800,000 property is A$8,000 — so the surcharge belongs in your city comparison from the start, not as an afterthought once you've fallen for a specific property.
3. A worked example: the real cost on an A$800,000 purchase
Take a foreign buyer purchasing an A$800,000 apartment in New South Wales. The layers stack like this:
Ordinary transfer duty: roughly A$31,000 (sliding scale, indicative);
Foreign-purchaser surcharge at 8%: A$64,000;
FIRB application fee: typically several thousand dollars, rising with price;
Annual land tax surcharge: an ongoing yearly cost for as long as you hold as a foreign owner.
Before legal, inspection and loan costs, the duty layers alone add close to A$95,000-plus to an A$800,000 purchase — around 12% on top of the price. That is the number that should drive your budget. For how FIRB approval interacts with all this at the point of purchase, see our companion guide on the Australia property buying process.
The planning point: the surcharge is tied to being a foreign person on the relevant date. If permanent residency is close, the timing of your purchase can legitimately change whether the surcharge applies at all — which is a numbers decision worth modelling before you commit.
4. The ongoing cost most buyers miss
The one-off surcharge gets attention because it's large and visible at settlement. The annual land tax surcharge is sneakier: it's charged every year you hold the property as a foreign owner, and it compounds against your net rental yield. If you plan to hold for the long term, this recurring charge can, over several years, matter as much as the one-off duty. A property that looks like a 4% gross yield can slip meaningfully once the annual surcharge is netted off — so model it into your hold, not just your purchase.
5. How to keep the duty bill under control
Budget the all-in number first — price plus ordinary duty, surcharge, FIRB fee and annual land tax surcharge — before you shortlist anything;
Compare states on total cost, not sticker price, because the surcharge swings the real cost;
Confirm your status and timing with an accountant — if PR is near, model buying before vs after;
Get the current rates in writing from your solicitor, since states adjust surcharge rates and definitions.
The bottom line
For an overseas buyer, Australian stamp duty is really three costs wearing one name: ordinary duty, the foreign-purchaser surcharge, and an annual land tax surcharge that keeps running. Budget all three from the first day, compare cities on the all-in figure, and get your timing and status checked by a professional — and the duty becomes a planned cost rather than a settlement-week shock. If you'd like help modelling the true cost of a specific purchase in Cantonese, that's part of how we work with Hong Kong buyers.
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