When you’re buying a property, there’s a high likelihood that you’re going to need to pay a tax known as stamp duty on top of the price originally agreed on for that property. Stamp duty is a tax levied by all Australian states and territories on property purchases. It is considered one of the most expensive costs you will encounter when buying a property in Australia. It may also be incurred for motor vehicle registrations, insurance policies, leases and mortgages, hire purchase agreements and transfers of property.
The amount that a buyer pays for stamp duty when it comes to a property, for example, is based on the property purchase price, location and loan purpose and can vary in rate depending on which state the property is purchased in.
As a rule of thumb, the more expensive the property is when buying, the higher the amount of stamp duty to be paid. What you pay for stamp duty may vary depending on the state, as it depends on factors such as first home buyer benefits and concessions that some states may not currently have in place.
A property that is worth $500,000 for example may incur an estimated stamp duty tax of over $11,000 in the ACT. Still, in South Australia, a property priced the same may have to pay an estimated $25,000 in stamp duty tax instead.
The revenue from the stamp duty tax is added to the state government’s budget, and then redirected to other government sectors to finance further improvements.
Under certain circumstances, concessions or exemptions from paying stamp duty may be available to you.
In NSW for example, there is a stamp duty concession for first home buyers where they are exempt from paying stamp duty on new and existing homes valued up to $650,000.
Buyers of first homes that were used as a residential property and which are worth between $650,000 and $800,000 could be eligible for stamp duty discounts of several thousand dollars.
These rules vary depending on the state or territory, so it’s crucial to find out what applies to you to save you money. We may assist you with finding out whether or not you may be eligible for concessions or exemptions, so come speak with us.
