Understanding Stamp Duty
Stamp duty is a levy placed by State governments on various transactions. It has been levied on property purchases by State Governments in all states for many years, although the rates of duty differ from state to state. The key points about stamp duty from a property buyer’s viewpoint is that it will be required to be paid upon registration of the Transfer of Land and as such needs to be allowed for when calculating your home deposit. In practical terms a property purchaser needs to pay the purchase price plus stamp duty at settlement.
How much stamp duty is payable will be reliant upon three factors. These are:
- Is the property the place of residence or an investment property?
- Whether the purchaser is a first home buyer
- Whether the property is vacant land, a new or established home.
Overlooking the impact of this cost when calculating loan affordability can have some disastrous consequences. Fortunately, there are many stamp duty calculators available online to assist you in calculating the cost.
The current economic climate has seen all state governments introduce tax exemptions on stamp duty for property purchases. These initiatives have generally favoured first home buyers or new home builders. Exact details vary from state to state.
NSW for example has currently exempted stamp duty payments for properties values at less than $550,000. Partial exemptions are available for properties valued between $550, 000 and $650000.
If you need assistance in calculating the amount of stamp duty that you will be liable for, please give the tea at Australian Finance Hub a call and we will be happy to assist you.