How to pay stamp duty with a credit card

By   |   Verified by David Boyd   |   Updated 13th January 2022

How to pay Stamp Duty with a credit card

Nobody ever liked paying stamp duty, but with the median cost of property in Australia hovering around $1m, paying the government fee is more onerous than ever before.

Little wonder then that many Australians — strapped for cash as is often the case when buying a house — would like to pay their stamp duty with a credit card as a way to mitigate the immediate impact on their personal finances and spread the cost out over several months.

Can you pay stamp duty with a credit card?

You can pay stamp duty with a credit card in most states.

However, the Northern Territory's Territory Revenue Office (TRO) do not accept credit card payments.

Tasmania accepts credit cards but places a limit of $5,000 per payment, meaning you could make multiple payments of $5k as required.

$1 million property value

Stamp duty example

$1 million property value

Home buyers purchasing a $1 million property in NSW as their primary residence will face a stamp duty bill of around $40,000. Assuming you have enough available credit on your credit card to pay the stamp duty, a 1% card processing fee may also be applied. That's an extra $400, bringing your total cost to $40,400.

Fees

Before paying with a credit card, keep in mind that you may incur additional fees and charges.

  • Paying by credit card will incur an additional payment processing fee, typically in the range of 1 - 3%.
  • If you don’t pay off your credit card in full, the interest rate on purchase, usually around 20% p.a., will be charged. Therefore, interest on a $1,000 charge for transfer duty would be around $17 per month.
  • If you pay with BPAY, check with whoever issued your credit card that they will not charge the cash advance rate on BPAY payments. In addition to the cash advance interest rate, which may be higher than the purchase rate and is incurred immediately, there will also be a cash advance fee.

You can partially offset the cost of stamp duty with rewards points worth at the very least .5c per point (depending on what you redeem your points for).

Keep in mind

  • American Express may not be as widely accepted.
  • Make sure you have enough available credit on your card before paying.
  • Pay the balance off in full as soon as possible to avoid paying interest.

Paying transfer duty as a business

An additional payment option may be available if you are a business with an ABN and wish to pay using an American Express credit card that is not accepted by the state. In this case, you could use a third party payments service — funded with your credit card — to pay your stamp duty or land transfer duty. Examples include B2Bpay and RewardPay.

Earning rewards points when paying stamp / transfer duty

If your credit card earns rewards and the state accepts credit card payments, you may be able to earn a significant number of points.

The value of these points, when redeemed for flights or hotel bookings, could offset the cost of any additional processing fee charged. In effect, you are buying points.

Pros and cons

Pros

  • Spread out the cost of paying transfer duty.
  • Potentially earn a significant tranche of rewards points for something you would have paid for anyway.

Cons

  • Not every state accepts Amex credit cards as a form of payment.
  • Interest will be incurred if you do not pay the balance in full.

Alternative payment options

Here are some alternative options if you cannot or do not want to use a credit card.

Payment methodRequires cleared funds?Earns rewards?
Debit cardYesNo
Bank transferYesNo

Verdict

While it is possible to pay stamp duty and transfer duty with a credit card, it is not for everyone. If you have the funds available — or know that you will have enough to pay the balance in full when it comes due — then paying with a credit card can help with cash flow at a time when there will be many financial commitments to meet.