Stamp duty on cars and vehicles in NSW

If you’re buying a car in New South Wales, whether it’s a new or used vehicle, you’ll need to factor in stamp duty NSW car costs. Stamp duty is a state government tax that applies whenever a motor vehicle changes ownership. This applies to both a new vehicle and a used vehicle, no matter if it’s been bought from a dealer or a private seller.

When buying from a dealership, stamp duty is usually part of the driveaway price. But if the vehicle is purchased privately, then you’ll need to pay stamp duty directly to Revenue NSW when you register the vehicle.

Why do you have to pay stamp duty?

The NSW Government collects motor vehicle duty to fund general public services and road costs. As a government charge, it applies to passenger vehicles, non-passenger vehicles, light vehicles, and heavy vehicles — in other words, every motorist has to contribute to keeping NSW’s infrastructure well-maintained.

How much stamp duty do you pay in NSW?

Stamp duty is calculated based on the purchase price or the market value of the car — whichever is higher — and it’s paid on both new vehicles and used vehicles.

Here’s how the duty is calculated in NSW:

• For vehicles valued at $44,999 or less, the rate is $3 per $100 (or part thereof) of the purchase price or market value.
• For passenger vehicles valued at $45,000 or more, the duty payable is a flat $1,350, plus $5 per $100 (or part thereof) above $45,000.

Here’s an example to help illustrate things: if you buy a new car for $50,000, your car stamp duty would be:

• First $45,000: $1,350
• Remaining $5,000: $5 per $100 = $250
• Total stamp duty payable = $1,600

How to calculate stamp duty on your car

If you want to estimate how much stamp duty you’ll need to pay, the NSW Government has an online stamp duty calculator. All you need to do is enter the purchase price or market value and vehicle type (e.g. passenger vehicle) to get the exact amount of your vehicle stamp duty costs.

New and used cars: Does it affect stamp duty?

Yes, whether you’re buying a new or used car, the dutiable value is determined slightly differently. It’s a way to make sure buyers can’t understate the sale price to avoid paying stamp duty.

• For new vehicles, the dutiable value is the purchase price, including GST.
• For used cars, the dutiable value is either the sale price or the market value, whichever is higher.

Stamp duty exemptions in NSW

Some vehicle purchases are exempt from motor vehicle stamp duty. Stamp duty exemptions in NSW apply to those who are:

• Full battery electric vehicles and hydrogen fuel cell electric vehicles (under 4.5 tonnes) bought on or after 1 September 2021, with a dutiable value up to $78,000.
• Caravans
• Vehicles transferred within a deceased estate (i.e. left to you in a will).
• Vehicles awarded as part of a divorce settlement or de facto relationship breakdown.
• Vehicles awarded to eligible war veterans.
• Vehicles registered in another state with duty already paid.

There are other exemptions as well. If you think that you qualify for a stamp duty exemption, you can apply directly through Revenue NSW when transferring registration.

What happens if you don’t pay stamp duty?

Failing to pay stamp duty can, as you’d expect, result in penalties — or at the very least delays in your vehicle registration process. A vehicle cannot be legally driven on NSW roads until the vehicle registration duty is paid in full. Anyone who neglects to take this step can expect to face fines and complications when registering the vehicle in the future.

The good news is that business owners can claim certain car expenses as tax deductions at the end of the financial year, which might help make up the cost of paying stamp duty.

Stamp duty on passenger vehicles vs non-passenger vehicles

The amount of stamp duty also depends on whether your motor vehicle is a passenger vehicle or a non-passenger vehicle.

• Passenger vehicles are cars that can carry up to nine occupants (i.e. sedans, hatchbacks, SUVs).
• Non-passenger vehicles include utes, vans, motorcycles and trucks.

Passenger vehicles valued over $45,000 have a higher stamp duty rate than lower-value cars.

How NSW compares to other states

Victoria

Motor vehicle duty in Victoria depends on the purchase price and type of vehicle, with green vehicles (low emissions) getting lower rates. Like NSW, passenger vehicles valued over a certain threshold are charged higher rates.

Queensland

Queensland’s vehicle registration duty varies by engine type (electric, petrol, diesel) and whether the vehicle is valued above or below $100,000.

Western Australia

WA pay stamp duty costs based on the vehicle’s dutiable value at the time of the sale.

South Australia

In SA, rates depend on whether the vehicle is commercial or non-commercial, as well as its market value.

Stamp duty and electric vehicles in NSW

To incentivise cleaner transport options and create a greener environment for everyone, the NSW Government has stamp duty exemptions for full battery electric vehicles and hydrogen fuel cell vehicles (under 4.5 tonnes) with a dutiable value of up to $78,000.

How to reduce or avoid paying stamp duty

While you can’t always avoid paying motor vehicle stamp duty, there are a few savvy strategies for potentially lowering your vehicle stamp duty costs:

1. Look for exempt vehicles: If you’re buying a qualifying EV, you may be eligible for an exemption.
2. Family transfers: Transfers between immediate family members (parent to child, or spouse to spouse) can sometimes qualify for exemptions.
3. Check for business exemptions: Some primary producers and charitable organisations can qualify for vehicle registration duty exemptions. This might also play into your business’s capital expenditures (CapEx).
4. Lower sale price: Go for a cheaper vehicle if you want to minimise your stamp duty payable – this is particularly important for passenger vehicles valued above $45,000 where the rate goes up quite sharply.

Special cases: Camper trailers, heavy vehicles and more

Camper trailers and caravans in NSW are exempt from stamp duty, unlike in some other states.

Heavy vehicles (over 4.5 tonnes) have their stamp duty calculated at a flat 3% of the dutiable value, capped at a maximum of $12,000.

The bottom line? Stamp duty is a government charge you simply can’t ignore when buying new and used cars in New South Wales.