Investors compare stamp duty across states and stop there. Stamp duty hurts once. Land tax arrives every year you own the place, and over a normal hold it can dwarf the duty you agonised over at purchase.
So we ran the numbers. Stamp duty at purchase plus ten years of land tax, on the median dwelling in all eight capitals, using the same rate tables that sit behind our calculators.
What we modelled
Each capital’s median dwelling value at 31 July 2026 (Cotality), bought by an individual investor, held ten years. Stamp duty comes from our stamp duty calculator and land tax from our land tax calculator, both running 2026-27 rates checked against the state revenue offices in July.
Land tax is charged on land value, not the whole property, so the model assumes land is 55% of the dwelling value. That assumption moves the totals, so we tested it at 40%, 50%, 60% and 70% as well. The ranking barely budges, and the top and bottom do not move at all.
Held flat at today’s rates, with no indexation and no land value growth. Real bills will be higher. This is about the gap between states, not a forecast.
The ten-year cost in every capital
| Capital | Median | Stamp duty | Duty as % | Land tax, year 1 | Land tax, 10 yrs | Ten-year total |
|---|---|---|---|---|---|---|
| Canberra | $883,138 | $30,055 | 3.40% | $6,001 | $60,010 | $90,065 |
| Melbourne | $797,354 | $42,911 | 5.38% | $1,766 | $17,660 | $60,571 |
| Perth | $1,029,797 | $44,150 | 4.29% | $666 | $6,660 | $50,810 |
| Sydney | $1,244,617 | $50,195 | 4.03% | $0 | $0 | $50,195 |
| Brisbane | $1,104,094 | $44,010 | 3.99% | $573 | $5,730 | $49,740 |
| Adelaide | $944,909 | $45,800 | 4.85% | $0 | $0 | $45,800 |
| Hobart | $756,951 | $29,248 | 3.86% | $1,361 | $13,610 | $42,858 |
| Darwin | $642,175 | $31,788 | 4.95% | $0 | $0 | $31,788 |
The spread is $58,277 between the top and the bottom. On a median purchase, held a decade, doing nothing.
Canberra: cheap to buy, dear to hold
Canberra has the lowest stamp duty rate of the eight at 3.40% and the highest total cost by a distance. It is not close. At $90,065 it costs nearly $30,000 more than second-placed Melbourne and almost triple Darwin.
The reason is that the ACT is deliberately swapping one tax for the other. It has been phasing stamp duty down for years and funding that with land tax, which it charges on every rented residential property from the first dollar of land value. No threshold. A fixed charge of $1,778 for 2026-27 plus a marginal rate, billed quarterly.
For an owner-occupier that trade is defensible. For an investor it is a straight transfer from a one-off cost you can borrow against into a recurring cost that comes out of rent every quarter for as long as you hold. It is the single biggest thing to model before you buy in the ACT, and it is why we walk clients through the holding cost first when they ask us about a Canberra investment purchase.
The duty saving is real. It is just small and it goes quickly. Canberra’s $30,055 is $11,102 below the average duty of the other seven capitals, and at $6,001 a year the land tax eats that saving in under two years. Everything after that is cost. Hold the full decade and the land tax alone comes to $60,010.
Why Sydney’s land tax bill is zero
Sydney has the highest median in the country and the biggest duty bill at $50,195, and it still lands mid-table because its land tax comes to nothing at that median. NSW has the most generous threshold in the country at $1,075,000 of land value, and a single median Sydney dwelling sits under it.
That is a threshold effect, not a permanent feature, and it is the part investors misread. Buy a second NSW property and the land values are added together against that one threshold. The second purchase can trigger a bill on the first. It is also why NSW freezing its thresholds from January 2025 matters more each year, because land values keep rising into a line that no longer moves.
Melbourne’s $50,000 threshold
Melbourne is the opposite case. The cheapest median of the mainland capitals, the highest duty rate in the model at 5.38%, and a land tax threshold of just $50,000, which almost any investment property clears on day one.
That combination puts it second at $60,571. Victoria is the only state where an investor pays a top-tier duty rate on the way in and starts paying land tax immediately after.
What to check before you buy
Model your own land value, not ours. The 55% assumption is a modelling choice. Your rates notice carries the actual site value, and on an older house on a big block the land share runs higher, which pushes land tax up.
Count your existing holdings in that state. Every figure above is for a single property. Land tax aggregates within a state, so the marginal cost of your second purchase in the same state is usually far higher than the first. Our guide to reducing land tax across a portfolio covers how that compounds.
Check the entity. A discretionary trust pays land tax from the first dollar in NSW and from $25,000 in Victoria and South Australia. The same trust is neutral in WA, Tasmania and the ACT. The structure that suits one state can be the expensive one next door.
Remember land tax is deductible. It comes off rental income, so the after-tax cost is lower than the headline. Stamp duty is not deductible; it goes into the cost base and reduces capital gains tax when you sell.
Where this changes the decision
None of this says buy in Darwin and avoid Canberra. Tax is a cost, not a strategy, and a market with no land tax and no growth will lose to a market with land tax and 6% growth every time. Growth and yield still decide the purchase.
What it does say is that comparing stamp duty alone gets the answer wrong, sometimes badly. The state with the cheapest duty rate in the country is the most expensive place to own a property for a decade, and you would never see that from a duty table. When we compare markets for a client the holding cost goes in next to the yield, because it comes out of the same rent.
If you are weighing two states, run both through the stamp duty and land tax calculators with your own numbers before you decide, and read the state-by-state land tax breakdown for the thresholds behind these figures. For buying outside your home state, the interstate purchase guide covers the rest of the process.
This is general information only and not financial advice. Tax treatment depends on your circumstances and the figures here are a model, not a quote. Speak to a qualified professional before making investment decisions.
If you want the holding costs modelled on a specific brief before you commit to a state, book a free discovery call.
