Stamp Duty and Everything You Need to Know

Stamp Duty and Everything You Need to Know

By: Nfinity Financials0 comments

When you’re buying a house, there are different fees you’ll have to pay. One of the main costs at the beginning of getting a home loan is called stamp duty. Here’s what you need to know about it.

What is stamp duty?

Stamp duty is a tax that the government in Australia charges when you buy certain things like real estate. This tax applies to things like transferring property titles, buying cars, getting insurance, and taking out home loans.

It’s essential to know that stamp duty can make a big difference in how much you pay for a property. So, before you decide to buy a new home, make sure you understand how much stamp duty you’ll have to pay.

How much does stamp duty cost?

Here’s the deal: the more expensive the property, the more stamp duty you’ll have to pay. You can Call at 1300 GET LOAN or book a consultation call to have expert advice in calculating stamp duty cost.

Several things affect how much stamp duty you’ll pay for a property:

  • Where you’re buying: Each state has its own way of figuring out stamp duty, so the amount varies.
  • Property price: Usually, if the property costs less, the stamp duty is lower.
  • Type of property: Buying vacant land usually means less stamp duty compared to buying a house that’s already built.

When do you pay stamp duty?

In most states or territories, when you buy a property, you’ll usually need to pay the stamp duty within 30 days of either signing the contract or finalizing the purchase (which is called settlement). So, after you’ve signed the contract or when the deal is settled, you’ll have about a month to pay the stamp duty.

Stamp Duty in Australia: State-by-state

As mentioned, the amount of stamp duty you pay can vary from one state or territory to another. Plus, there are different discounts or benefits available for first-time buyers and pensioners in each place.

New South Wales Stamp Duty Costs

In New South Wales, they call stamp duty “transfer duty.” How much you pay for transfer duty depends on how much the property is sold for or its current market value. There’s a regular rate for most properties and a higher rate for fancy homes worth more than $3,000,000.

NSW Standard Transfer Duty

Starting from July 1, 2023, the First Home Buyers Assistance Scheme got better in New South Wales. Now, you can get a stamp duty exemption up to $800,000, and there are discounts for properties up to $1 million. You can figure out how much stamp duty you’ll owe in NSW by using either the transfer or land or business revenue calculator.

Victoria Stamp Duty Costs

Stamp duty rates changed on July 1, 2021, for new contracts when you buy taxable property. But if you signed a contract before then, you might follow older rates. Keep in mind that stamp duty costs vary in Victoria. Different rules apply depending on your situation. Discounts and exceptions are worked out differently based on the type and value of the property.

If you’re buying your first home and signed a contract after July 1, 2017, you might not have to pay stamp duty or might get a discount. Contracts from before that date could mean a 50% cut in duty.

For new homes in Melbourne worth up to $1 million, there’s a chance of getting a 50% discount or not paying stamp duty at all if it’s your primary residence. Pensioners might also get a break depending on their property’s value.

Foreigners buying residential property have to pay extra duty along with the regular land transfer duty.

Queensland Stamp Duty Costs

In Queensland, stamp duty isn’t too expensive. But if you have a seniors card or pensioner concession card, there aren’t special rates for you.

Foreigners buying land here have to pay an extra 7% stamp duty on top of the usual rates.

If you’re eligible, Queensland gives breaks on stamp duty. If you’re buying your first home for under $550,000, you might get a first-home concession that could save you up to $15,925.

Western Australia Stamp Duty Costs

In Western Australia (WA), the duty rates can be either standard or discounted depending on your situation. There’s also a special rate for first-time homebuyers if you’re buying your first property.

WA General Stamp Duty Rates

If you’re transferring property between spouses or de facto partners, canceling a transaction, dealing with family farm transactions, or making charitable transactions, you’ll need to apply for a stamp duty exemption.

South Australia Stamp Duty Costs

Foreign buyers have to pay an extra 7% stamp duty rate.

But there are exceptions and discounts if you meet certain conditions. If you’re buying your first home, you might qualify for first-home buyer relief on stamp duty. This relief could lower or even eliminate your stamp duty, depending on your property’s value.

Tasmania Stamp Duty Costs

In Tasmania, the stamp duty costs change based on a sliding scale. It’s determined by the property’s value without any debts, or the price you paid, whichever is more.

Tasmanian residents might get stamp duty discounts. First-home buyers of existing homes and pensioners moving to smaller homes can get a 50% discount on stamp duty if they qualify.

There are also exemptions available, like exemptions for personal relationships, relationship breakdowns, and transferring family farms to the next generation.

Australian Capital Territory Stamp Duty Costs

In the Australian Capital Territory (ACT), they call stamp duty “conveyance duty.” If you’re buying a home to live in and it’s worth up to $260,000, you’ll pay a lower rate of 0.49% on eligible properties starting July 1, 2023.

From July 1, 2023, buyers won’t have to pay conveyance duty on commercial properties worth $1,800,000 or less. But if it’s more than that, there’s a flat rate of 5%.

If your deal is before July 1, 2023, you might follow older rates. You might also qualify for conveyance duty exemption based on your situation. To find out about discounts and exemptions, it’s a good idea to get in touch with the ACT Revenue Office or visit their website.

Northern Territory Stamp Duty Costs

In the Northern Territory (NT), stamp duty rates are figured out as a percentage of your property’s value.

Pensioners, seniors, and carers in the NT might get up to $10,000 off stamp duty when buying homes (up to $750,000) or vacant land (up to $385,000). The NT government also gives a Principal Place of Residence Rebate (PPRR) of up to $7,000 for new homes, land, big renovations, and similar things.

Who is exempt from paying stamp duty?

For first-time buyers in some states, stamp duty exemptions and further concessions can make buying a home easier.

In NSW, you’re in luckā€”it’s one of the most generous states. If the new home you’re eyeing costs less than $550,000, you don’t have to worry about stamp duty. Pensioners and health card holders may also qualify for discounts or exemptions. Just reach out to your local Office of State Revenue to see if you’re eligible.

In Queensland, you might get an exemption from transfer duty if you’re transferring an interest in your home to your spouse or changing tenure between joint tenants and tenants in common.  

In Victoria, the first home buyer duty exemption is quite common for properties under $600,000.

How can you minimize your stamp duty?

In most states, if a property is valued over $500,000 or vacant land is over $300,000, the stamp duty will be higher. So, buying a property below these amounts means paying less.

Check if you qualify for any stamp duty concessions or exemptions. You can also try negotiating with the seller to lower the property price and reduce stamp duty costs.

For a clearer picture of your stamp duty expenses, reach out to Nfinity Financials, Read Our Related Articles or Schedule a Consultation call with us today at 1300 GET LOAN, we have answers to all your questions

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