Yes, usually — and it is the buyer who pays. Item 5 of Schedule 1 to the Stamp Duties Act (Chapter 117) charges duty on conveyances or transfers on sale of real property, and the duty is payable by the purchaser, the person deemed to be the purchaser, or the person to whom the property is agreed to be conveyed.
But the rate depends heavily on who you are and what you already own.
Citizens buying a home to live in
Item 5(a) sets concessional rates where the property is a residential property and the purchaser is a citizen.
| Situation | Value | Duty |
|---|---|---|
| First home. Neither the buyer nor (if married) their spouse has previously owned a residential property in PNG or elsewhere, and it is bought solely as their principal residence | Not exceeding K500,000 Exceeding K500,000 |
Nil 5% of the value in excess of K500,000 |
| Has previously owned a residential property in PNG or elsewhere, buying solely as principal residence | Not exceeding K210,000 Exceeding K210,000 |
2% of that value K4,200 + 5% of the value in excess of K210,000 |
| Owns a residential property and is buying another solely as principal residence | Not exceeding K210,000 Exceeding K210,000 |
2% of the value K4,200 + 5% of the value in excess of K210,000 |
| Owns more than one residential property and is buying another | — | Duty at the general rates in paragraph (b) below |
A citizen first-home buyer purchasing solely as a principal residence pays nil duty up to K500,000. On the general scale, a K500,000 property would attract 5%. The conditions are strict: citizenship, residential property, no previous ownership by you or your spouse anywhere in the world, and purchase solely as your principal residence.
Item 5 adds a definition worth noting: for this item, “residential property” includes any residential property of which a person has a land use entitlement, directly or indirectly, under a marketable security or other chose in action. Holding a home through a company or unit structure does not put you outside the item.
The general scale
Where paragraphs (a) and (ab) do not apply — commercial property, an investment purchase, a non-citizen buyer, or a citizen who already owns more than one home — paragraph (b) applies:
| Value | Duty |
|---|---|
| Does not exceed K35,000 | K5.00, or 2% of the value, whichever is greater |
| Exceeds K35,000 but not K70,000 | 3% of the value |
| Exceeds K70,000 but not K140,000 | 4% of the value |
| Exceeds K140,000 | 5% of the value |
Note that these are rates on the whole value, not marginal bands. A property just over a threshold attracts the higher rate on everything.
A separate rate applies under paragraph (ab): where the property is a mining lease, special mining lease or exploration licence under the Mining Act 1992, or the subject of a licence under the Oil and Gas Act 1998 — 2% of the value.
Duty is on value, not the price you agree
Section 14A deals with the value of property conveyed or transferred, and section 20 gives the Collector power to assess. Agreeing a low figure in the contract does not by itself fix the duty. Where the Collector considers the stated consideration understates the value, the assessment can proceed on value.
Related transactions the Act catches
- Section 37 deems certain instruments to be transfers on sale.
- Section 38 deals with a transfer subject to a mortgage.
- Section 39 covers consideration payable in instalments.
- Section 46 charges an agreement for transfer on sale, and section 47 deals with sub-sales — so a contract, not only the final transfer, can be dutiable.
- Section 48 provides for rescission or annulment of an agreement. See refunds.
- Division 3A (sections 48A–48F) catches transactions carried out without a dutiable instrument, requiring a statement to be lodged instead.
Exemptions worth knowing
Item 5 carries eleven exemptions. Among the ones an ordinary family may meet:
- Grants from the State of land in the country.
- Marriage settlements.
- Transfers to or in trust for bodies associated for religious, charitable, recreational or educational purposes.
- Transfers to beneficiaries under wills, or in pursuance of letters of administration of a deceased estate — see gifts and deceased estates.
- Transfers to an executor or administrator for the purpose of administering an estate.
- Certain trustee-to-beneficiary transfers where duty on the prior conveyance was paid or not payable and the Collector does not regard it as duty avoidance.
Duty is a real cost of buying, and the 60-day stamping deadline in section 18(1A) runs from execution. Budget for it, and get the transfer stamped on time. Rates and thresholds change by amendment — confirm the current figures with the Internal Revenue Commission or your lawyer. See also State land, titles and leases.
Sources
- Stamp Duties Act (Chapter 117) — vLex
- Constitution of the Independent State of Papua New Guinea — PacLII
- PNG Consolidated Legislation — PacLII index
Rates are those in Schedule 1 to Chapter 117 as consolidated to No 14 of 2019. The Mining Act 1992, Oil and Gas Act 1998 and Land Act 1996 are not carried in PacLII’s consolidated Acts database; the index above is the starting point.